Works fine for a stable software enviromnent, but who has that?

One problem is that, like it or not, most development projects include meetings with a mixed bag of systems engineers, developers, business managers, and a dba or two. Usually somebody gets up and starts drawing servers, databases, code, business processes, etc on a whiteboard.  OK, OK, there are technical workarounds, but having a dba physically present is a good thing.

Another problem is that sometimes developers or systems folks need a very quick answer to a question to keep everybody else on a team working. My experience in working with remote consultants is that they are often committed to other customers as well. Phone calls, emails, IM's are not returned within a couple of hours. A couple of hours times each person working on a project equals a lot of team hours.