Due to a lack of imagination and people who don't host interviews on a regular basis so they never put in the effort to get good at it. When I conduct a technical interview we are going to end up doing some stuff you do in your 9-5. And you probably won't even notice it. And if there is a budget available for it, I'm going to pay you to do a very small coding assignment. A few hours. Almost exactly your 9-5.

The fundamental difference is that a job is directly at stake based on your performance. For many people, this makes them more nervous than they would ever generally be during work. Due to the nature of interviews, I don't think there's really a way for it to be otherwise.