Coding on paper should ever only be done as a pseudocode or paper prototyping exercise. There is value in the ability to think abstractly without an IDE prescribing structure for you, but there is zero practical value to testing a developer on whether he can write compiling code by hand on paper. We don't use punch cards anymore.

You can dig postholes with a spoon, and you'll develop some really great forearm strength from doing so, but I'll be over here using a postholer to put up 75 posts for every 1 of yours.