I don't think any good senior devs are under the illusion (privately) that they're rusty at whiteboard interviews. I'm certain my college grad self fresh out of practicing for the ACM contests could have run circles around my recent job search self when it comes to algorithm stuff. I had to practice and then pass a ton of whiteboard rounds to get my current senior developer job, so I'm not saying this out of bitterness.
However, and I think this is the crux of the problem, you're not paying senior developers for that. I've never had to actually do any algorithm slinging on this job. The fanciest it usually gets is chaining some maps and filters.
On the other hand, I have had to do "rocket surgery" on critical path legacy code, write business logic in a maximally predictable and readable way, figure out how to land a non-backwards compatible change with no downtime, convince other teams to help with an initiative my team is leading, design an internal API, etc.
Doing that stuff requires experience, rigor, resourcefulness, and I'm sure you can come up with more "senior" traits. My personal complaint about whiteboard interviews, even systems design interviews, is that they only indirectly measure those traits.