I'd rather spent 6 hours on a toy project instead of the 200+ hours I spent studying for Google. Solving problems on a white board is very different compared to solving problems on a computer with a plain text editor. I did significantly better in another interview where I was given a laptop connected to a projector instead of having to stand and write on a white board for 4 hours in one day.

The skills I would have to hone to do well in a Google style interview are very different from the skills I would have to improve to excel at my job. I wonder if Google prefers this system because the type of people that are willing to spent hundreds of hours honing their interview skills are also the type of people that are willing to invest a lot of their free time into their job beyond what is required.