Definitely not an idea way of getting candidates - you are selecting for people who know how to manipulate screens (and thus increasing the risk of getting a bad candidate), or rejecting otherwise knowledgeable people who just don't have the time/inclination/"social savvy" to pretend to be stupid.
If you can't figure out that the first person who's interviewing you has answers on a sheet of paper and you're supposed to parrot them until you get to the second person, how are you ever going to figure out that the first person you're selling to has some business requirements on a sheet of paper and you'll never get to the second person until you parrot those?
"Oh, we're not actually using Docker, we're using rkt, which is a compatible reimplementation of --" "I'm sorry, I've been told Docker is a requirement. We can't use your Cuber Netty thing until you support it. Bye!"
Perhaps, but if the story is true, then it's wishful thinking to assume Google tried to do just that by putting a moron or someone acting like one in the recruiter chair. That way you risk hiring a quick talker who can talk, joke or laugh his/her way out of a wrong answer. If technical skills don't really matter, it's fine though.