1) I don't program on a whiteboard. It's 2012, I have tools, and they beat the whiteboard setup every time.
2) I will never implement something that I have not implemented before without at least first consulting with a search engine. You see, I am not a genius that will come up with the best algorithm for a calculation every time I am put up to the challenge. My amateur attempts will be no where near as good as what others have collectively accomplished over the years that the problem existed.
For example, in this particular case (I have never had to implement a function that generates Pascal's triangle before), I can guarantee you that anything I came up with at a whiteboard right now would be completely inferior to what the result would be if I was allowed to do a search first. So unless you're trying to see if I am capable of writing any old crappy code so long as the result is correct, your test isn't adequate.
3) Interviews still make me nervous, doesn't matter how many times I have them, I never feel comfortable going through the process. This often leads me to simply draw blanks when given a whiteboard assignment of this nature. You may think this means I am just incapable of solving your problem, or that I perform poorly under pressure, but I can tell you that this type of "put you on the spot" pressure is much different from the type one generally feels in a work environment.