[jimbokun]

Pairing makes this seem less egregious to me, even if the company is getting some value from the process. In a traditional interview, both you and the interviewer would be spending the same amount of time, and arguably learning less about each other.

Asking for some work to be done off site before an initial on site interview, where the potential employer is getting something of value, would be a much bigger red flag to me, personally.