I think a lot of people here are missing the point that this is only one interview question, not the entire interview. You still need to ask icebreaker questions about the candidates experience to get them comfortable before breaking out a whiteboard question, and you should still follow up a "stock" question like this with a more specific question taken from your domain (if they make it that far).

I'd also add that you need to have several of these "stock" whiteboard questions on hand. If the interviewee seems to get the solution too easily, they may have heard the question before. Everyone knows FizzBuzz by now, and I gave three answers to "compute the nth Fibonacci number" at my last interview. These questions are no good anymore if you're trying to see how a candidate thinks on their feet.