It's tragic that engineering interviewers extrapolate a candidate's mistakes on a whiteboard during a tense, time pressured interview situation to the calm day coding at a keyboard during a real day at work. It's almost as if we forget what it's like to be an interview candidate when we're the interviewer.
Tragic? What's the alternative? Should we ignore mistakes made at the whiteboard because someone was under time pressure?
Sure, most software engineers (aye, even Google software engineers) are not under significant pressure on an average day. We get to work in the morning, we sit down at our desks, we hack on our code with our 30" monitors and customized editors, and we go home. It's a nice job, really.
But there are occasions when engineers are under pressure. There are deadlines. There are revenue-impacting bugs that need to be fixed while millions of dollars are at stake. There are segfaults in some new code you just deployed and the SRE team that's getting paged at 3am is threatening to burn your house down if you don't fix it before the weekend. Time pressure is not utterly foreign to a software engineer's life, and it's not unreasonable to do what we can to see how an engineer will function under such pressure. An engineer who can only properly function sitting at a desk with his 30" monitor filled with vim instances and ample time on his clock is lacking some measure of flexibility and capability that we reasonably expect to find in the best engineers.
No, we don't forget what it's like to be an interview candidate. You're just forgetting what the point of our interviewing is.