The question is, if a company is able to pull off 'remotes' do you think this is a competitive advantage since coordinating this seems to be so hard for some companies? Is it a survival mechanism for companies that might not otherwise be able to happen locally?
Is a company like 37signals, stackoverflow early or others possible in an office or did they succeed longer because they were remote? How has all the research been done across the world and across oceans? What about multiple offices, does remote communication suck that way as well? Is everything done in your office or are there some outsourced parts?
Remote skills and virtual communication are a requirement today, companies unable to do this are missing out on competitive advantages. Companies that can perform well remotely also look at external factors more I have found, offices get an internal sickness. I think a mix is probably best but a company must be able to operate remote I believe today. Companies that can't write/read/coordinate enough to remote probably can't coordinate customer communication as well either (who are all remote in many cases), it is an organization culture thing. In the end how many times and people at your office do you actually need to meet up with on a daily basis? Driving 1 hour both ways for 15 minutes of face time sometimes.
All this means for Yahoo is they are going to miss out on workers and engineers located outside of SF or a 'remote' office, the bet is being in the same place will beat out the pool of developers farther than 100 miles from a Yahoo office. And it sucks when that good engineer or employee has to move that you've invested in and knows or built successful products in the office...
Not the OP, but what I can say from my own experience is that people who work remotely are indeed seen by their co-workers as being "privileged" or "above the rest" etc. This might very well be an exaggeration, but the affect on morale and team-spirit is certainly there, especially during bad times.
To put it another way, let's say you just got into the office after a dreadful one-hour commute (by car, metro, doesn't really matter, we all experienced them), ready to drink your coffee when suddenly the server is down, or a crazy client is yelling on the phone at your sales-people who in turn yell at you, the IT dept. etc. What do you do then? You first curse the whole world for not allowing you to drink your morning coffee in peace and then proceed to quickly fix what needs fixing, you don't have time for opening bugs in the issue-tracker or skype-ing the guy who is tele-commuting and trying to explain to him what the hell just happened (by this point your boss might as well be asking passive-aggressively "do you know why this happened?", he's asking you who are on site not the guy who's tele-commuting). And so on and so forth, you just reason inside your head that none of this would have happened if you had had the same "privileges" as the guy who's tele-commuting.
Your anecdote actually seems to reinforce that for quality of life, remote working can be better. Same type of emergencies but communication has to happen during them, documentation, teamwork not throwing all out the window to fix a fire every two seconds. Yes they happen and rules can be broken to get sites running but overall places with constant fires need internal people. Places run like that aren't going to be successful anyways so blaming remote workers on that seems unfair. If the emergency happened after hours is your company setup to handle this remotely or are people driving in an hour to fix issues? (i.e. remote repos, access etc). Workplaces and teamwork are great but can suck in bad situations, at the office even more sometimes such as during emergencies but it has to be done. I like documented discussions and tasks/plans written out rather than just spoken. These tasks that are just spoken tend to change and are hard to track how long things actually take especially in emergency driven situations.
The modern office even with all the near proximity to others, people still IM, email, etc over face to face quite a bit to prevent interrupting flow states and barging in to fix some issue not related to your tasks that are due at the end of the day. And what about the people in the next building, are you walking over there or are you just IMing like you'd do to a remote worker. Location is almost irrelevant for well run teams.
I view remotes as a drain on the workplace and on my productivity, and I resent them for it. I've made the choice to live near my company's HQ, and make that damn commute every day, so that my workplace gets the best of me. Remotes have not, and I wonder if they get paid the same as me while they sit at home, and I view them as selfish.
The prospect of not having to tolerate remotes actually perks my interest in working at Yahoo.