I agree that intelligence and work samples are the most critical things to look at. The trick with work samples is that most people focus too narrowly.

Yes, coding is a critical part, so don't skip it. But so is team communication (no matter how great of a programmer you are, if you won't respond to my emails, I won't think you are a great employee). So are code reviews (if you call people morons for not agreeing with your style, no matter how great of a programmer you are, I won't think you are a great employee). So is mentoring (if you can't explain concepts to people who aren't as smart/experienced/whatever as you, no matter how great of a programmer you are, I won't think you are a great employee).

I could go on. I think it is some of these softer skills that many interview questions have tried (and mostly failed) to suss out. Back to the OP, I can see it being a reasonable effort at experiencing some of the non-coding work requirements.

Much better than "how many ping-pong balls would it take to fill this room" and "design a nuclear reactor for me", both of which have been asked of me in web developer interviews.