My bigger concern is that for a job that specifically highlighted the need for at least some SQL skills and some Java expertise, a candidate that can not, even after prompting, write a for loop in Java (or in any language, when offered the chance to do so in a "favorite" language") or write a SQL statement that joins two tables probably can't do much of anything, let alone work on interesting problems.

Here is the cold, hard truth - I know, both because of my own limitations and the opportunity of the job, that we are not going to get top % hackers. But if you apply to a job where the primary need is coding in blub, I think its fair to expect a simple question or two about basic blub constructs. I myself would be nervous about whiteboard coding for something complex, but also generally offer (in a cover letter) to provide some code examples to talk through at an interview ahead of time.

I think it behooves us all to have at least some baseline expectation to demonstrate some competence. Remember, I'm not thinking that whiteboard coding of an algorithms or anything.

I think a very fair (and concerning to me) insight might be: if you can use Google and an IDE, can you do all that this job requires?