It's extremely cheap to built and operate. Cleaning one large office is fast and hence cheaper, than 10 smaller offices.
Often the "lost productivity" isn't factored into the cost of open plan offices, mostly because it's to complex I think. Interestingly the gain from better communication is always factored in as a positive.
I do know people that prefer open plan offices. They all have headphone on for a large part of the day though. People that prefer an eerie silence, like myself, aren't normally not considered when planning office building.
Peter Drucker is often attributed the quote "Culture eats strategy for breakfast". For some reason many organizations seem to believe that in the modern office, furniture will eat culture and turn it into an Aeron chair clone.
With the right combination of people, it can actually be quite fun and encourage communication, IMHO.
However, if people have to make or take phone calls, it can become really annoying quickly. Try to focus with two or three people sitting around you talking on the phone. Especially if one or more of these people talk to people who are on construction sites or inside industrial plants, so you have to talk rather loudly so they can understand you... On a few occasions (rarely, though), I have just put on headphones and listened to white noise to drown out their talking.
The right combination of people doing the right combination of work. One of the ostensible purposes of open plans is to facilitate communication and collaboration. Unfortunately, every collaboration session throws off those around who are not involved.
That's why I like open plan in small spaces -- IE, a conference room with 4-8 desks in it for a single agile team. All business-related conversations probably apply to all or most of the team anyway, and at least for a development team the phone chatter will probably be minimal. The walls keep you from distracting unrelated employees with your discussions, but the openness keeps the highly-relevant people in the loop.
I have yet to see or work at a company organized like this. Usually it's dozens of people from multiple teams commingled in a single large room. Where I work now the entire company only has 8 people, but we have 5 different projects going on, of which I am only involved in 2.