Interesting, because I've been telecommuting my entire professional career, across three well-known corporations (two of which had between tens of thousands and over a hundred thousand) employees. I've also regularly fielded job offers from everything from start-ups, to companies on the verge of going IPO, to established industry biggies -- all happy to offer telecommuting opportunities and having an entire infrastructure to facilitate such work. Even my manager and many of my past managers over the last 15-20 years telecommute.
What benefit, for example, is there in having people show up to an office in a corporate campus, when that individual's colleagues are very likely spread across several other campuses across the country (or the world)? Great, you're in the office! Unfortunately, you're 800 miles away from your nearest teammate and 3,000 miles away from your manager.
Requiring employees to work locally will seriously curtail the number of qualified and motivated employees who can more than fulfill the demands of your position but are simply limited by having already established roots in a community and aren't able to buy and sell homes every five years and transplant their wife and kids just so that an upper manager at some point can feel secure in the knowledge that they can walk down the hall and see someone hunched over their desk.
There are some companies or positions where this may not fit - that's hardly worth establishing the claim that "telecommuting is going away!" from.