As someone with a lot of industry experience: It's great to know how people solve puzzles and tackle algorithms. It's even better to know how they can fit those solutions into a bigger picture, how they structure, comment and document their code, and how they interpret a use case and user stories.

Dealing with things in the abstract, stripping it of context, interface, interaction, and real world requirement, seems to be an incomplete way to understand the capabilities of the person you're potentially hiring.

Unless, of course, you're hiring for the position of Junior Abstract Puzzle Solver. In which case, by all means, Godspeed.