This is incredibly true. I once turned 60kLoC of classic ASP in VBScript into about 20kLoC of python/django including templates. And added a bunch of features that would have been impossible on the old code-base. It turned the job from hellish (features were impossible to add) to very nearly boring (there wasn't much to do anymore). So with this newfound freedom I built some machines to automate the data entry and on…
I think there is. Show the candidate some bad code. Not WTF code, but something you wouldn't be proud of but is realistic. Bonus points if you're comfortable enough to pull this out of your own production system. Ask the candidate about adding some functionality, but be clear that cleanup and refactoring changes are fine (even encouraged). The conversation should be enlightening.