2 hour deadline and forcing the task to be done at the office turns it to a different kind test. This becomes more like how do you perform under stress and how well can you propose things out of your head. These are valuable skills as well, but I think having the weekend to spend with the problem more accurately models the actual development work.
Pressure comes in many forms. Certainly, being able to handle pressure is a good thing. But how often is it needed and what kind of pressure is it? What kind of relief have you got?
As I understand it, the more common form of pressure would come from having to deliver things in a tight schedule, and perhaps in certain kinds of meetings and presentations. Not from being forced to work in a foreign environment with foreign computers & tools and unknown people hanging around, watching and JUDGING you. If a company puts an engineer in the latter position very often, it might be doing something rather wrong. Whereas in the former situation, employers can find relief in at least having colleagues they are familiar with and an environment they're used to & comfortable with.
Your point is valid, although technically it would be under pressure as opposed to stress. The difference might seem minor but it's rather significant, and it's a characteristic many employers would intentionally want to measure. I highly recommend the book Performing Under Pressure, by Weisinger & Pawliw-Fry.
