Honestly, there is ZERO reason to force everyone to drive to one location for a conference except for the drinking and dining on the company dime afterwards.
I disagree. Strongly.
My company (Google) uses videoconferencing extensively; every conference room is a video conference room with high-quality screens and cameras, and every meeting that involves people in multiple sites is a video conference. The VC system (which is the same tech in Google Hangouts, er, Video Chats) integrates with the calendaring and room booking system so everything gets linked up automatically. Anyone can project their screen to the VC with a few keystrokes. The result is extremely productive, especially when combined with Google Docs.
However, I still fly to remote sites to meet physically with the teams I collaborate with, and do it on a regular basis. A couple of times per year to overseas locations, and at least quarterly to the nearer sites, and drinking and dining boondoggles have nothing to do with it (I abhor business dinners). Why, then? And why does the company gladly fund and even encourage these trips?
Because they're necessary. VC is great for exchanging information, but very bad for building personal relationships. Meeting someone in person, even if all you do is have exactly the same meeting you would have via VC, dramatically improves the working relationship -- even if it was good to begin with.
Why this is, I don't really know. I do notice that physical co-location reduces the formality of the interaction in subtle ways. I think part of it might be the unnoticeable but still present latency in VC communications. The lag may only be 30 ms, but I think that 30 ms matters in the spontaneity of interaction. I think most of it is probably just that people become more real to you when you shake their hand and smell their BO (or, hopefully, lack thereof). Whatever the basis, the fact is that it's hard to make a human connection with an image on a screen.
And, much as I hate it, a night or two out socializing and discussing things completely unrelated to work (bringing spouses along really helps to ensure that) does a great deal to cement those relationships.
Once you've made those human connections, VCs are great vehicles for communication. But until you have a sense of the people on the other end, VCs are inherently less effective even in the best of times, and when things become stressful and have the potential to become antagonistic, the human connections are what make collaboration possible.