Tight collaboration doesn't scale all that well though. From what I've seen, once a team has built a product/service they now start to put up red tape around it and make changes harder and harder the longer it exists. In other words, teams starts accumulating bureaucratic debt, it is very similar to technical debt. It is great to have that for the sake of stability, but the agility/creativity from more individual work is also great.

There is no reason you can just have one or the other, if you already have a lot of tight collaboration then you probably miss out on many potential changes that are too disruptive to be politically feasible. But you are right that you can't have only individual work, organizations needs tightly collaborating teams to be an organization.