Because the people they hire can't do all the algorithms at interview speed either - they were just lucky to have reviewed the right material recently.
i just think its annoying because lots of companies cargo cult google and what thet do is a largely tangential skill set from the rigors of day to day programming work and knowledge. its a ritual from when they were hiring small numbers of graduate students with no real programming experience to measure them on. also the whiteboard is a relic of a time before there were laptops with hotswap 2nd screens.
Because it's not a good measure of your programming skill. To be honest, I legit don't care whomst Google hires, what I hate is that there are all these other people who start adopting these attitudes and it can have a really shitty influence on the whole industry.
I don't think you need to worry about it. Google does interviews like this because they can afford to reject many good developers because they have much more candidates than they actually need to hire. I guess only most popular tech companies can do that. I bet it will never become a standard for the whole industry.