The problem with this question is they have to remember on the fly a problem that fits the criteria of your question. This can be a difficult thing to do.

I was interviewing recently and I ended up writing down a bunch of "stories" I could use for interviews. Found it too risky to try come up with them on the fly. This was both for technical questions and the non-technical "Tell me about a time when you had a conflict with your manager.."

But I've had plenty of times when people have asked an open-ended question like the above and I've blanked out or ended up telling a not-very-good story cause it was the one I could think of.