If they are OK with things like "I cannot remember if the second parameter of Java's String.substring is end index or length, let's just assume it's length here", I don't see how inefficient whiteboard coding is (besides typing on the keyboard is usually faster than writing on the whiteboard).
cut-paste: if you are doing this a lot, you are doing it wrong.
refactor: sure. but for whiteboard interviews, it's rarely needed, or it's small enough that you can just wipe and rewrite it again on another part of the whiteboard.
Of course, all these points are assuming that the interview question is "suitable" for whiteboard interview. If you find yourself need to write more than 100 lines of code on a whiteboard during for an interview question, at least one of the interviewer and interviewee is doing it wrong.
it's just code on a whiteboard. none of that stuff matters.