Text can work OK between people who know each other well and are familiar with each other's patterns of speech and sense of humor. Not perfect, but generally OK.

Much worse between people who aren't so well acquainted. I'm actually in the middle of trying to mediate a disagreement based mainly on two entirely different perceptions of intent in some stuff that was written in an email.

I definitely agree with this, however, most people moved away from verbal communication because it's an async process, and it removes any awkwardness from the interaction. Video conferencing is used occasionally. I think text-based communication is here to stay.