Open allocation seems to have one drawback. You still do need (a few) managers and executives (not to order people around, but to keep track of the bigger picture) but it's hard to hire managers from outside into an open-allocation shop because typically they want promises of authority, and OA is directed through leadership rather than intimidation.

Most companies move toward the closed-allocation end of the spectrum because they perceive a need to do so in executive recruiting. Most executives don't want to take a position where they won't have the power to unilaterally fire people.