So whose preferences really matter here? Who holds the power in the equation? I'll give you a hint: it's not anyone who actually cares how productive work gets done.
It is absolutely a difficult problem for modern companies to deal with. Hybrid seems like the best/worst solution so that no one is happy and both parties compromise.
And even if you believe that’s a complete fiction, it’s a fiction which has sustained itself for decades and after a brief loss of belief during the pandemic appears to be on the rise again.
And even if you believe that’s complete fiction, it’s fiction that companies and management believed in enough to pay the same individual 2-3x the amount of salary after paying to relocate them to SF from Idaho.
Whether true or not, management and leadership has believed the benefits of employees being colocated physically for a long time and continue to believe that, and that’s what’s justified high tech salaries. Without that reality or fiction that they strongly believe in they have no reason to continue paying the high salaries you sre used to.