In general I'm a big fan of this sort of interviewing because the work the person did on the server can give you great insights into what sort of systems administrator they are--do they give you a good insight into how the system has been altered from the default install? Do they document the "why" of any changes they made? Were they able to craft a readable shell/python/ruby/whatever script to cover any automated processes they had to hack together?
I don't know what Google SRE technical interviews are like, but I can't imagine a one-on-one giving as many useful insights for an entire team as the artifacts left behind by someone setting up an entire server from scratch.
Not to mention the ability to weed out people who don't have the basics in place--when someone can't even figure out how to ssh to the server, you know pretty readily that they're probably not suited to the work.
