CareerCup

Yes, this can be done with a few lines of bash on the console. It is O(n^2 log(n)) in time where n is the #lines in the file, with O(1) in space. The nlog(n) is only because uniq does not work without the sort.

It can be optimized in time, by trading off space and using a hash. At that point, you will need a higher-level scripting language like Python or Bash (or Perl), which is trivial to write. By using a hash, you can have O(n) time complexity, with O(n) space.

for ip in $(sort IP.txt | uniq)
do 
	count=$(grep -c "$ip" IP.txt); 
        # 5 is just an arbitrary number, you could ask your interviewer for the limit
	if [[ count -ge 5 ]]; then    
		echo "BLOCK $ip"
	fi
done

Input text file:

121.132.133.141
121.231.12.41
121.132.133.141
121.231.12.41
121.132.133.141
121.231.12.41
121.132.133.141
12.39.80.1
121.132.133.141
14.15.16.19
15.14.119.10
1.10.102.12
12.39.80.1
121.132.133.141
121.132.133.141

Output:

BLOCK 121.132.133.141

what's a higher programming language? Is Perl? Is Bash? You basically only need a way to parse the file and an associative dictionary (ideally a hash table) and then you need a block function you can somehow call.
Does it make sense to block on requests per IP only? It might be a proxy server or many users sitting behind a NAT. ... anyway, iterate the logs and count per IP using a hashtable should do it.