I have had several candidates with established work history who were turned down on the basis of their coding work during technical questions in interviews. For example, I once interviewed a candidate who had written a popular developer tool for the Mac; the candidate was applying for a job on a developer tools team and had an excellent resume. And did not know what a binary tree was, did not know what recursion was. Though success in industry may be correlated with ability to solve the most basic problems one faces every day when building the semantic analyzer for a compiler, it is by no means a perfect correlation.
Demonstrated ability to take the specification of a simple, recursively-defined property and translate it into two lines of correct code on a whiteboard is a pretty good correlate.
And of course, as I pointed out in the article, I am much more interested in how the candidate reasons about the code, not whether they can write two or three lines of correct code on a board, or type them into a computer.