I was polite but ended a phone interview recently when they wanted me to code in a Google Document.
But given that it's most likely the result of junior hiring managers giving marching orders to junior engineers (i.e. the people conducting the screening) who just don't know any better than to say "no" to such a silly and insulting request to make of incoming candidates... the depth and reach of this annoying fad becomes less surprising.
On the other hand it would be idiotic to expect people to be able to code in IDE XYZ (whether it has vi and emacs mode or not).