This is a bizarre assertion. Humans developed formal hierarchies because people with swords thought they were an efficient way to steal surplus wheat from peasants. The fact that after millennia of living under hierarchies, people don't have good skills for living without them doesn't mean we chose those hierarchies in the first place.
"Doing so allows an organization to set consistent patterns that can vastly increase efficiency over more arbitrary and capricious systems."
You've simply stated what I stated while claiming to disagree with it, while using a perfect example of why it's true.
What you miss at the end is that humans will always organize into hierarchies. Informal hierarchies are something built into us as a species, and instinct to organize our social groups. But brains often beat instinct, and our ability to use our brains to build more efficient social structures than our ad-hoc instinctual ones has demonstrated to be better over the long run.
Hierarchies are not the only way to divide labor.
Flat organizations emphasize informal power structures and you'll find that surveys of employees in flat organizations point to consistent and repeatable problems.
Summary of most of the surveys: for the most part, any employee who hasn't made it to the "in" clique (which will be most of them) is in for a miserable time.
A non-scientific bit of insight can be gained from looking at the employee reviews of notable flat/structure-less companies on glassdoor.