I've been doing enterprise software project management for 10 years. Here are my experiences with 2 ERPs and numerous other large-ish projects.
The open concept works for the very early period when you're collaborating with your business folks, figuring out the roles and responsibilities, the design, and the team. The more closed-in (and remote work) approach works much better in the build phase, when the contributors are most effective uninterrupted. This latter point is one reason, often, that ERP deployment teams are sequestored to a separate facility and not allowed to continue legacy support. Execs/management recognize that as a success factor. So, yeah, both sides are right. You need each environment for a different purpose.
I've been running worldwide projects for a bit as well, which is almost a perfect picture of work-at-home effectiveness because the foreign teams NEVER are in the office. Frankly, communications are extremely strained (misinterpretations from lack of body language and emphasis), balls get dropped often, and there is very little in terms of team culture. That latter point is huge to PMs who know what it takes to deliver stellar project products: a cohesive, fun-loving team.
Even celebrations, which I feel are crucial to keeping you star tech folks, are difficult if not impossible. Again, you're missing the team opportunity.
There was a concept I got the joy to work in at Purdue University (as an employee) where individual office cubes (no doors) were set in a star pattern around a common area with table. The common area was the visioning, planning, and design point. The offices were the concentrated, individual work centers. It really was a great environment. But they ran out of space and so the "pod" environment disappeared.
Lastly, managers have offices with doors for lots of reasons. Promotions, raises, disciplinary action, confidential executive discussions, constant phone calls and meetings (which many of you likely hate). All those, done in a public environment, are disruptive at best and acidic at worst. I never had one of those offices, so its not like I've got some vested interest, either.