I think it's rather common, even nowadays. I'm in computer engineering and not CS, but I've had many exams where I had to write C, C++, Java or Matlab on paper (introductory classes, system programming, OOP...). I've seen this posted before as well.
Eh, yeah. The end of semester exams were always on paper. Policy or something. Can't say I much enjoyed drawing UML or writing Java and C++ on paper. The worst was the digital image processing, where we did get to do it in the computer labs (basically, transforming images in matlab, usually fft -> masking, multiplication or some other simple operations -> ifft), but had to sketch the results on paper...