What's the probable usage of Interlock Protocol
The interlock protocol still relies on an external verification mechanism, otherwise the eavesdropper can replace the challenge with his own challenge.  In the example in the paper, they mention recognizing the voice of the person reading you half the challenge.  That's the external verification.  Without a pre-shared piece of information, a computer network or protocol has no external frame of reference, and can't "challenge the challenge."  

Thus, we still need entities like certificate authorities (only better.)