Working on a whiteboard is definitely a skill, but one that's worth developing if you plan to work with others on a complex project.
That said, they really shouldn't have been giving this guy standard CS questions. Sure, you want to make sure that he understands why writing his string concatenation loop the wrong way will result in O(n^2) behavior, but he was interviewing for a front-end position.
There are also a bunch of algorithmic questions that come up in the browser as well, because unlike a lot of sites, Google actually cares about latency. You often can't use a library function if it involves pulling in a 300K library, nor can you write an O(n^2) algorithm if it involves locking up the browser.
Newer numbers would be good :)