It is well documented in social psychology that individuals have a hard time with difficult tasks in front of others because their working memory is monitoring the social situation. It is called "social facilitation theory." Technical interviewing is not based on any kind of evidence based HR practices but is entirely instinctual. My pet theory is that the whiteboarding / coderpad epidemic is really a status hierarchy game where individuals make it clear 'if you want to work here, you are going to do what I say.'