[weavejester]

Given that many open source projects are developed by a distributed team, it seems to me that there are plenty of examples where this has worked well.

While face-to-face communication is perhaps the best mechanism of communication at the moment, a centralised team has a far, far smaller pool of potential hires to draw from. It's effectively a tradeoff of communication vs. talent.

My own opinion is that communication between fully distributed teams isn't that bad, and is getting better all the time. The small advantage of having a centralised team doesn't seem worth reducing your talent pool by several orders of magnitude.