Humans are social creatures so there is often business value in spending some money to allow people to socialize, hang out, and eat and drink together. That's where face to face meetings are irreplaceable.
However, if the work is well understood and there aren't personality conflicts that need to be worked out and team cooperation to be built, then teleconferencing is much more effective. In person meetings and whiteboards facilitate "winging it" whereas teleconferencing (I mean with screens sharing, not just voice) tends to encourage getting your information into at least somewhat organized electronic form. This can be harder, but it's harder because it's not allowing you to be as lazy as just sitting around talking and maybe scrawling an incomplete and inaccurate diagram on the whiteboard that you never bother finishing or archiving for future reference.
I wish my employer would spring for a bit more business travel, but I would be lying if I said it would make me more productive.
I should also mention that instant messaging with presence indication is also an essential component of working across geographic distance. I'm much more effective working with people when glance at a list of names on my screen shows me instantly who's available at this moment. The people who are never "online" in IM require a much more inconvenient phone call/voicemail/email/walk down the hall.
I have certainly wasted time at in person meetings waiting idly by while someone I wanted to talk to was busy talking to someone else about some topic that didn't require my attention.