Well, I agree to a point. Though you have to realize, these are fundamentals taught in a CS education. You are groking them as if they are a boogeyman made useless by your particular career path. Didn't you get an A in your algorithms class? Surely some painful review would be part of the solution? The onus is on you for forgetting your fundamentals and not preparing to the interviews. That's the playing field, and everyone has to suffer.
But if you are a recent graduate or undergraduate, you should absolutely have the algorithmic reasoning skills to either 1) find the solution after some hard thought or 2) remember it from past experience (ergo prompting a harder variant from the interviewer). The angle that these questions just require memory that you are portraying is something I vehemently disagree with.
Though I don't think my words have that much weight. I'm halfway through a CS Degree and I'm pretty much going to be happy if the question is technical, doubly so of the sort that you've described. Don't get me wrong, as I would love a take home question, and please, grill me on my projects I've written. In 20 years I very much believe I'll be different. I think this is a sort of industry negative bias we have, one which the fresher graduates outdo older more experienced candidates because they have a (for whatever reason) less activity with algorithmic thinking that's like OP described. I hope I'm only asked technical questions for the start of my career (because that's pretty much what I have), and later more experience drilled questions when I've gathered all the industry poke-balls.
In ending though, your title is lovely. I think it's OK to not know how to balance a binary tree as someone who has industry experience as you say you have. Now let's change the industry! Wait, we cant? Well fuck. I guess /u/Arab_Dictator should pickup his notes when he got an 'A' in algorithms (well deserved, no satire) and let google lube his ass with their phallic interview techniques. I'll be next in line, please. Oh sorry no lube for me, I came prepared.