I concur wholeheartedly. I could tell you that manhole covers are round because the manhole is round. But this doesn't relate in any way to actually solving problems by developing algorithms, or to how you approach a large code base, or how rapidly you learn our particular problem domain, or how reliable you are, or how readable your code is, or if you're capable of working to specification.
I do a phone interview to make sure the candidate and I understand each other, and to filter out bullshitters. Then I give them a test which should take half an hour to complete. I make my decision to hire almost entirely on the solution they provide, although the manager-types always want to interview the candidate.
Google's hiring process stinks of shit and red herring to me. You might as well be hiring an accountant on the basis of how well they do at crosswords.