I have workflow configured to start when an item is created. Using the datasheet view, when adding a row, the workflows are not fired.
Is this by design?
No, definitely not by design. Generically speaking, workflows should run when adding a new item in the datasheet view.
Without knowing the specifics of what workflow method (OOB, SPD, WF, 3rd party, etc.) it's hard to give you a definitive answer.
If you add an item from a non-datasheet view does the workflow kick-off?