While I agree with you, it's also noticeable that many companies do have a broken hiring process, but they don't realize it, because things aren't bad enough yet. However, whiteboarding is not the culprit.

People complain whiteboarding because they've had bad multiple bad experiences with hiring processes that involve whiteboarding and they came to a conclusion that whiteboarding itself is the problem.

Unfortunately, you can't fix a bad hiring process by simply changing the technique. Each technique has its own pros and cons, but no technique will guarantee success.

These are the most common problems I've seen with hiring processes:

1) The people doing the hiring don't really know what they're looking for. Instead, they go by a vague, handwavy notion of whether the candidate is "a fit" or not. You have to define what "a fit" means in such terms that all of the people involve understand it, agree on it and know how to test for it.

2) The people doing the hiring don't know how to test for their criteria. Whether you're using whiteboard or a take-home project or some other testing technique, you have to design the test so that it helps you observe the traits you're looking for. [1] And you have to actually train your people to interview candidates.

3) Lack of transparency. This is a huge problem and it infests all aspects of hiring. Some recruiters won't even tell you which company they're hiring for. A lot of companies misrepresent what you would be doing for them, sometimes intentionally, but usually not. Some companies won't give you perfectly reasonable information about the job. [2] And, thanks to the litigious nature of our society, no company -- anywhere, ever -- will give the candidate honest, detailed feedback of why they were rejected.

4) The company is unreasonably demanding when it comes to candidate's personal time. The typical two-stage process -- a phone screen followed by on-site interview round -- is demanding enough, because it involves more than just the interviews. The candidate has to spend time and effort on other aspects, too: multiple phone calls with the recruiter, preparation for the interviews, travel, and juggling all of this with their personal and professional lives. Some companies don't understand this, so they think there's nothing wrong with a process that involves a take-home project, a debriefing phone call, a face-to-face conversation to test for cultural fit and a full-day on-site interview round.

Most companies don't even know that their hiring process sucks. Of those who eventually realize something is wrong, many end up cargo-culting whatever they read or heard about "more successful" cases. As things are right now, the whole situation is eerily reminiscent of the fuss and hype the industry went through with software development processes. I wouldn't be surprised to see yet another wave of parasitic consultants pop up to prey on companies by flogging their hiring process improvements and best practices.

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[1] This is where a lot of people's complaints go wrong. The most frequent grumble is: why does this company's interview process focus on algorithms and data structures, if you'll just end up coding some services in Java? If the company is doing things right, they're using these topics as a tool to observe and measure whatever it is they're looking for; most often, it's the candidate's understanding of computational complexity. Just because you won't be writing your own implementations of common data structures and algorithms, it doesn't mean you shouldn't know how to pick the one that won't blow up your memory or execution time.

[2] I had a case where I was interviewing with a company that gave me a print-out overview of their benefits, which included the price of each health plan, but not what it covered; when I inquired about it, they replied they wouldn't be able to give me that information until I signed the New Hire NDA.