Technically/Socially - An issue for all offices. I don't see my TFS to git migration going as well virtually. In person groups worked well. It's works well for a lot of things and often.
Productivity - Chat/SCM/etc are the hub regardless of physical location. In person we have access to white boards and pairing stations.
Commute - Every cyclist and public transit commuter gets a workout and decompression time. I still set my own hours with a core hour preference and accepting meetings that fit in my schedule.
Don't assume it's a technical and social issue. There's a spectrum of personalities and needs. I tried working from home with all the tools and a competent team socially. It was one of the worst positions in my life and had nothing to do with the work. I prefer my home away from home.
- Politics / Face Time. Some people really do think that nothing goes on when people are working from home. Some people like to have everyone's attention now and again, to demonstrate something about their status.
- They haven't figured out how to do it yet, both technically and socially. If you have one or two people who don't know how GitHub works, or how Trello or Slack work, you can't do it. There are certain people who come from an age where you never needed productivity tools, and they just can't use them, no matter how easy it is. Unfortunately, they tend to be the people who can decide whether remote is working out for the team.
- They haven't figured it out socially: some people have configured their home life in a way that doesn't work for remote. The associations between being in the home and being away from home are deeply ingrained in some folks.
As for actual productivity, I've found it skyrockets in a properly functioning remote team. We have a Slack/Trello/Github/etc mashup where Slack is the hub. Anything that comes up can be pinged to the right person, and you can see when people are pushing code. The cards let you organise things. No commute + set your own hours means you get things done.
Not being tied to a location is great, too, though I do try to make sure the family gets enough attention.