It's actually not possible due to the way Node looks up dependencies. You could have a situation like:

  node_modules/
    a/
      node_modules/
        c/ (1.0.0)
    b/
      node_modules/
        c/ (1.0.0)
    c/ (2.0.0)

Both a and b depend on c version 1.0.0, but since there's a version 2.0.0 in the root node_modules folder c can't be placed there, and has to be duplicated in a and b's own node_modules folder, otherwise Node couldn't find it for each of them.