Computers aren't ideal for interactive interviewing situations either. The problem is that when operating a computer, people tend to have trouble keeping up a c

Computers aren't ideal for interactive interviewing situations either. The problem is that when operating a computer, people tend to have trouble keeping up a conversation (thinking out loud) at the same time. When on a whiteboard, problems naturally need to be short and simple due to limited space, writing speed and editing capabilities. This leaves more room for interaction between interviewer and candidate, like planning an approach or discussing written code. Also, whiteboards are handy to sketch solutions non-programmatically, with diagrams etc. Of course, there's the trade-off that the enviroment differs more from actual day-to-day work.