Quite right. It's the equivalent of using a calculator when they're trying to test if you can add up. (A big clunky calculator). An understanding of HTML and CSS is important if the subject is web design. It's no good just drawing boxes in Dreamweaver unless the subject of the course is learning Dreamweaver.
Notepad is stupid though. I use Notepad++ or Visual Studio or Visual Studio code. Probably there wasn't an actual restriction to use Notepad. I mean what if you were on a Mac or a GNU/Linux box? And how would he tell anyway unless he was standing over you the entire time?
I was thinking pretty much this
![Stick Out Tongue :p :p](/styles/default/xenforo/vbSmilies/Normal/tongue.gif)