> there's a difference between knowing typical algorithms needed to solve a class of problems and studying to implement them on a whiteboard.

I'm not sure that's all that true; even if you haven't specifically studied to implement the particular algorithm, if you are familiar with the concept of the algorithm and proficient in the implementation language, then coming up with some kind of cut of an implementation isn't an unreasonable request. (Now, if the evaluation of the quality of the implementation is unreasonable for the context in which it was requested, that's a problem, but if its used to judge understanding of the concept, if potential problems in the implementation are the focus of probing questions to determine understanding rather than straight rejection, etc., I don't necessarily see a problem.)