As the author of said book who has coached MANY people, I can assure you that many - heck, most developers - could not pass a Google interview regardless of how much they prepared. They'll get better with preparation, but it doesn't just fix all issues.
Don't get me wrong. I made it through the Amazon interviews thanks to your book. I spent a week reading through and cranking out examples before the interview. Then I spewed out all of the desirable answers at each step of the interview process.
Now I'm a highly experienced developer with 15+ years experience across a variety of technologies. I contribute to open source, answer questions on Stack Overflow, present at technical meet ups. I solve problems that need solving even when no one else will step up.
Despite all of my experience, implementing hashes and sorting linked lists in place, as well as many of the other questions asked by these companies just don't come up on a daily basis. A good developer isn't someone who can explain those things in an interview, it is someone that can examine the problem and design a solution. They should have an idea of the tools necessary and then reach for the right book or use a healthy dose of google searching some api docs to build the solution.
The current interviewing techniques are broken. I would like to offer the solution, but quite frankly I've spent plenty of time interviewing people and we haven't gotten it down yet either.
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The ideas Malcolm Gladwell discusses in, "Blink: The Power of Thinking Without Thinking", applies here. Some of the most experienced developers will have an intuition for how best to implement a solution, this does not necessarily translate to them being able to well articulate the why and how.
So, you're a good developer who is smart and passed the interviews with some studying. That's exactly how it's supposed to work :).
You're right that the problems that some up in interviews typically aren't real life problems. But that's not necessarily an issue. Are the skills they test (developing good algorithms) important for real life?
An interviewer doesn't ask you to develop an algorithm to return a random node from a binary tree because they particularly care if you know THAT algorithm. They're asking as a way of evaluating your skills developing solutions to problems you haven't seen before.
I believe that is the most common argument made, but also therein lies the fallacy.
I'm not developing anything new when I implement a quicksort algorithm; Tony Hoare certainly was back in 1960 when he created it. The same goes for the hash; someone at IBM made a big leap when they first used hashes back in the early 1950s.
Since that time numerous people have made some improvements to these (and other algorithms of course), but by and large companies are just testing is the developer interviewing able to code existing algorithms and explain their Big-O notation.
I think you end up with 4 subsets that the interviewees fall into.
I = {interviewees}
A = {I | bad programmer and can't solve algorithms}
B = {I | good programmer and knows the algorithms}
C = {I | bad programmer but knows the algorithms}
D = {I | good programmer, doesn't know the algorithms}
It is subsets C and D that concern me.
In subset C we have someone that studied the algorithms really hard, but just can't write good code and solve real original problems. One approach to this is the "hire fast/fire fast" mentality, but in some organizations "fire fast" is not an option; so you would rather not hire them in the first place.
In subset D we end up missing out on good developers. In a bad job market there isn't much need to worry about this; if we miss a good developer easily enough we'll find another. Right now though developers are in such high demand I see this loss as a bigger deal.
I also think that this type of interviewing technique works better for the tech giants (MS, GOOG, FB, etc...) than it would for a lot of smaller organizations. A good set of programmers will self select out of interviewing at these companies because they don't believe they are "good enough" for MS(or alt). Additionally a good set of developers that do believe they are high caliber enough for these organizations will do some research about the interview process before hand and end up studying up on the right things before going in.
With smaller companies or businesses with non centralized hiring processes for developers interview candidates may just not know what to prepare for in the interview and while an algorithm may seem obvious in hindsight; there is a reason nobody was using it until it was "discovered". I can't reasonably expect someone to devise the answer to that type of question when I interview.
Honestly I would love to hear some ideas on this; as it has been a pretty major concern for me for the last couple of years.
