Last resort implies it would mostly never be used. But do we have any reason to believe flat hierarchy could ever be effective in a 1,000, 10,000, or 100,000 person organization?

I'd also direct you to some of the discussions of the subversive hierarchies that evolved under the surface of 2nd wave femenist, supposedly flat, groups.

Maybe we should also have less 10,000+ person organizations. The note about informal hierarchies arising in the absence of formal ones is very true, but that doesn't mean we can't reduce the problem if we aren't naive about it.

... and isn't the best way to combat the problem of informal hierarchies, to put formal ones in place eliminating the power vacuum?

Well, not if your goal is avoiding hierarchies.