I think tech is definitely a candidate's market but the corollary is that the tech market attracts a lot of candidates who can't perform. Real programming exercises are perhaps the only way to weed them out.
While I 100% agree you need some kind of code based part of your interview practice, there is a large range of exercises that are being spoken about.
It goes roughly from whiteboard problems to sitting at a computer with them over your shoulder to a couple hours before the interview to a full week of work. Everyone knows the lightest form is necessary the big question is how much you can get from increasing the complexity before people get annoyed.
We give prospective candidates a take-home programming project that should take 3-5 hours and is clearly not something we could use in production. We think that's a fair compromise.
