Can't agree more. Going to a programming interview without practicing on the white board is pointless. You're setting yourself up for a failure.

why do people insist on making candidates write code on whiteboards anyway, its the exact opposite of 'right tool for the job'

It has become the quick way for validating whether a candidate is suitable for the job or not. Some companies now go for tech-screens where they'll send you a problem to solve on the computer, but that's rare.

When a candidate is solving a problem on the whiteboard, an experienced interviewer can make a good judgement. In my experience, anyone who's a good developer does well on the whiteboard. However, the inverse is not always true.