My company just doesn't have product or project managers and it's wonderful. Fewer meetings, no intermediaries, more agility. It could only work in practice, it could never work in theory.
As someone who is responsible for 10-15 concurrent IT projects across numerous teams, many of whom I don't manage, this sounds terrible. I think the "no PMO' approach may work for homogenous groups whose focus is one project, but for a large organization, effective project management is a must.