This is the issue of privacy -- and is concerned with keeping everything "open" to an interviewee beforehand.
If you're being "watched" during the interview (through a camera) by other people in a separate room -- do you absolutely want (need) to be aware of this before the interview -- or is it OK if you were told this afterwards?
In my current company...
During an interview session -- which is strictly "one interviewer and one interviewee" -- we have 2-3 employees setting in room right next to where the interview is going on -- watching the interview process on a large monitor. These employees then vote (yes/no) for the candidate and the management takes those votes as an input in its decisions.
Now, after all the interviews are complete, all the candidates are taken to the next room. They meet with the company employees and have casual chat about the company, work environment, management, etc. It is there that the employees tell them that they'd watched the interview -- that it went well (even if it didn't) -- and that there was no recording.
This "after interview gathering" with employees makes candidates relaxed and feel friendly -- and (so far) no candidate has showed any concern about the deemed privacy infringement.
Does this sound unacceptable to you?
NOTE: I am asking this ONLY in the context of a "job interview for programmers (and software engineers)". Period. Do not generalize it.