Regardless of whether you agree with me about that, I think we can all stipulate that if work-sample technical evaluations work (and: they do), most of what companies try to evaluate in on-site interviews is stupid. No part of working effectively with a team requires timed recall of how to implement a stable quicksort, or reversing a doubly linked list at a whiteboard.
At the very least, using work sample tests allows you to build an on-site interview process that honestly engages with "team fit" (or whatever your X-factor is).
My guess, though, is that when more teams adopt work samples and then go through the motions of trying to design a pure team-fit interview, they're going to realize --- once they don't have "implement Bellman-Ford on this whiteboard" to fall back on --- how unequipped they always were to evaluate team-fit in the first place.
The ridiculous whiteboard coding of puzzles probably stems from laziness or inability to implement what you're suggesting. I know that personally, if someone asked me to developed a work sample evaluation for my job, it would take me many hours to come up with something, and frankly I even once complete we would have no way of knowing if it is actually a good predictor of whether or not someone is the right employee.
I'm religious about this topic for a reason. :)
No, I attribute the turnover to the recruiting mechanism. We found great people who were sorely mispriced by the market, and we took advantage of that to create a win-win scenario: people without the resume to get a similar job at a competing firm got an extremely impactful resume bullet and a good-paying job, and we got people who genuinely wanted to be on our team and weren't applying as a once-a-year lateral job-hopping gamble.
(I have no problem with people job-hopping, by the way, but every employer is trying to minimize their exposure to that.)
Really my comment was just to help demystify why this sort of thing doesn't happen in many companies based on my own observations.