Personally I think all exams or any academic assessment should be open book/whatever. Entire class should be allowed to find solutions together with whatever means possible and there should not be time limit.
What do you do when large numbers of people don't care, and are content to leech off the few conscientious students who actually want to learn the material? This was a normal state of affairs during my undergrad at a crappy community college and state university. Group projects were a nightmare.
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The best classes that I've taken have been "Feel free to collaborate, but turn in your own work." It allows people to work together on hard problems, but the slackers still fail.
I think people mostly waste time at the universities learning things they will forget. Giving students a novel problem to solve and ask them to come back when they find the solution might work better in terms of sticking knowledge. This doesn't necessarily need to be a group project.
It would be great for learning, but requires an enormous amount of work for the academics involved. That side is pretty important in explaining why the system is the way it is. It is due to have some novel ideas injected about how to balance effectiveness and efficiency.
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The best classes that I've taken have been "Feel free to collaborate, but turn in your own work." It allows people to work together on hard problems, but the slackers still fail.