In my experience, pure mathematical knowledge just by itself seldom translates into good coding skills. This is after I've TAed Maths, CS and Physics courses for almost 4 years.

Typically we have 45 minutes to interview someone and asking a question where one has to derive a mathematical formula using induction/ calculus is not well served to gauge their programming abilities.

But I totally agree with you on your last point - just because someone is not a good hire now, does not mean they never will be - that's why even if you don't crack an interview, you can reapply in 6 months time.