I'm not asking you to work for free. I'm asking you to provide code samples. There's a big difference. It's no different than coming into my office and coding on a whiteboard for me.
And for your other argument, I have a full time job but will sometimes take very short term (5-10 hours of work) contracts for interview purposes. Usually this is a last step before getting a job offer, more as a way to gauge whether I'd work well with the team than whether I can code in general.
It doesn't have to be for free. I know someone who would "hire" potential candidates for a 2-week contract, and based their skill on the code they write during that time. If the candidate doesn't end up getting hired afterwards, he still gets paid for his time. It's a win-win.
