During my career I have often met the argument that it's an advantage to work in the same geografical location. The reason for this is always something in lines of missing out on informal talks and the feeling of belonging to the team.
I often feel like this is a poor argument and has more to do with conformity and control than anything else. It's not uncommon to hear a project manager complain that he or she doesn't know what I'm working on. My response is of course that I work on the tasks and problems assigned to me. The problem is not me working from a different geografical location, it's more about poor project lead.
The advantages of diversity in location is that the project members are inclined to think for them selfs and bring a diversity in ideas to the project which leads to better solutions. It also makes it easier to look at solutions in a critical manner and explore and try different possibilities.
Of course geographical diversity means the project team needs good tools to communicate and work. Today we have excellent tools like wikis for information and documentation, github and the likes for sharing code, bugzilla et al for tracking tasks, and a plethora of VOIP and IM applications to choose from. A good policy on which tools to use and how work should be done is all that is needed.
Teams that are afraid of critical thinking and diversity are poor teams doing a poor job.