To me, due diligence would be more like using software that someone has created. If it feels snappy then they're good enough at algorithms for the kind of software that they create, if it doesn't then maybe it's worth looking into whether or not there's a good reason for that.
Like if you apply for a job at the NYT, I doubt they make you do a timed writing test with people staring at you and asking you questions in the middle. They probably just read some of the previous work you've done.
I do not want to work with anyone who finds that getting their hands dirty is beneath them. It is very, very rarely going to be a good use of their time to do those problems. It will often be a good use of their time to teach those problems. A senior engineer, even one who’s unlikely to work with junior engineers on a regular basis, will need to explain their thinking. They need to show humility and compassion. Those are practiced attributes. This precise situation is the best practice you can get - New and Unknown person, some amount of challenge and complexity involved.
Thinking that whiteboarding problems are a bad use of time is a very strong signal for a senior person who is out of touch.
When you are considering hiring a nobody, this is acceptable. You will interview multiple people, and they will interview at multiple places, so the randomness isn't that important.
But if you want to hire one specific guy as a strategic hire, suddenly the randomness may no longer be acceptable.
It's really scary to go to company that is willing to hire you without ever talking to you.
(Unfortunately this happened in a small Eastern-European country, so the company was an investment bank, not Google.)
When I was leaving Google the first time, I asked my skip lead (who was employee #48 there, ended up running all of Search, and was previously a core HotSpot engineer at Sun) why he chose to work at a small startup when, coming off of HotSpot in 1999, he could work anywhere. He replied "Aside from them being one of very few companies with an engineer-centric culture, they were the only company that required I interview. Everybody else was willing to hire me on the spot."
For some personality types - and particularly the ones likely to do world-class work - being challenged is a positive sign. It means that the employer does their due diligence, and they will mostly be working with other people who react positively to a challenge.