As I understand it, the goal was also to network with other small businesses using the same space. The spaces were set up to encourage people to find opportunities to work together -- cross-marketing, sharing resources, new ideas. Kind of an incubator, without the financial support or design.

Not inherently a bad idea, though it's full of Silicon Valley optimism where one serendipity produces tons of money while a lot of other things just fail to gel -- but some people get paid regardless.