The government departments lost a most of their key people whom had no interest to uproot their kids and their own future career from the Oslo area. Especially as some department moved to some very small provincial fringe towns where future opportunities are limited. Departments moving to larger towns (Stavanger/Bergen/Trondheim) was probably less affected. And it did result in very large increases in travel budgets as meetings still mostly had to be held in Oslo (airport) with other departments and companies.
Though in theory it was a move I supported. To help decentralise and support local economy but also so e.g. fisheries department actually being in an area where fishing is important probably affect their policies etc. But it does come with a cost, they miss the quick collaboration across department and other industries, and most importantly reduced staff contribution in the (potentially very long) transitional period until new local competent people are up to speed. I think a lot of staff did not move and ended up working from home for parts of every week for a few transitional years before moving full time or most likely eventually a suitable person could replace them.
I think it's fair to say that it's not been a massive success, and that federal employees generally did/do everything they could to stay in the old capital.
Aside from the fact that the entertainment and cultural options available tend to be limited, distance from the rest of the family and friends, as well as the perspective of being tied very strongly to a single employer are usually unappealing.
You run a real risk of losing anyone senior/competent, and keeping only the most junior of your staff, who have no other option but to relocate.
To stand any chance of success, I would think that the process needs to be fairly gradual, with good transport connections with the historical centres of activity.
(You can check this with chains like Cleveland-Detroit-Chicago-St Louis-Kansas City; each interval is less than 300 miles)
I don't disagree that it would need to be an incremental process.
I've seen a few of these proposals now. The good ones have a clear rationale for relocation: the Australian Federal Treasury, for instance, is moving a sizeable chunk of their workforce from the capital (Canberra, population ~400,000) to Sydney (population ~5m). Why? Because the financial industry in Australia, and many regulators in the Treasury portfolio, are based in Sydney. Seems logical to do this if you agree that lower-level, person-person connections are valuable (I think they are).
The bad ones have no clear rationale, and co-incidentally the relocation target happens to be a marginal electorate in some regional area...
Just a fantasy though. About as likely as high-speed rail from SF to NY.