This doesn't take into consideration how much studying and preparation the person who produced a solution quickly did compared to the person who took longer. I

This doesn't take into consideration how much studying and preparation the person who produced a solution quickly did compared to the person who took longer. If that person studied much more, then they weren't really "quicker", they were just better prepared. Perhaps that's still a reason to hire them, but not everyone has time to study lots of programming puzzles before an interview, and this is then less a measurement of speed, and more of preparedness. It also doesn't take into consideration whether the whiteboard problem being presented is at all relevant to the job being offered.