I am not necessarily advocating the whiteboard, but am advocating attention to detail no matter what the situation is. I agree the whiteboard can be stressful, but so can a server outage and needing to get a fix out quickly. I don't want a programmer that generally has good attention to detail unless they are under pressure... under pressure is when you need it most.
The idea that every programmer should be able to write runnable programs under extreme stress without any errors is ludicrous. That has nothing to do with "attention to detail". It's like professors who give you a failing grade for making a single sign error in the middle of a complicated three page Laplace transform that is otherwise correct. What they really want is to just humiliate you for the power trip.
The "server outage" scenario is a red herring. The vast majority of programmers don't have to fix server outages under pressure that is anything like that at a job interview. Also, you might try hiring programmers instead who write reliable software to begin with. I've written server software, for instance, that has been running continuously for the last dozen years without ever being touched by a human being since. I was also a sysadmin for a seven years, and had to deal with various emergencies all the time. Never was the pressure anything like trying to code at an interview, and the systems I designed and maintained worked great.