Robin Hanson on why telecommuting hasn't become more prevalent:
The standard proximate cause, described in the quote above, is that workers and their bosses get a lot of detailed emotional info via frequent in-person meetings. Such detailed emotional info can help to build stronger feelings of mutual trust and affiliation. But the key question is, why are firms willing to pay so much for that? How does it help firm productivity enough to pay for its huge costs?
My guess: frequent detailed emotional info helps political coalitions, even if not firms. Being able to read detailed loyalty signals is central to maintaining political coalitions. The strongest coalitions take over firms and push policies that help them resist their rivals. If a firm part adopted local policies that weakened the abilities of locals to play politics, that part would be taken over by coalitions from other parts of the firm, who would then push for policies that help them. A lack of telecommuting is only one of a long list of examples of inefficient firm policies than can be reasonably be attributed to coalition politics.