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Eight years ago, I joined a team of 6 who worked together in the office and were free to collaborate when desired. Over time, as technology was embraced and hiring became less localized, teams became spread across the country and now there are only 2 of us in the office, and live collaboration is almost nonexistent.
As someone who has experienced both worlds and everything in-between, I can say with complete confidence that there is nothing as efficient and productive than the ability to print something out, walk it over to your creative neighbor, and talk through a solution. What just a couple of designers can accomplish in mere minutes, in-person, working together takes a week or more with calls and chats and PDFs to accomplish virtually.
Collaboration is still necessary.