Do people value programmer productivity so little that they're willing to throw so much of it away to save a few dollars in real estate costs?
The main thing, though, is serendipity: overhearing party A ask party B a question to which party B doesn't know the answer, but I do, or hearing people planning to have a meeting I'd want to be in, but which they don't know I'd want to attend, etc. A closed office would be slightly more useful when head-down coding for hours or days at a time, but so much of my time as a developer is spent chatting about coding, helping people solve language or environment problems, talking with users who wander in looking for help, and other miscellaneous interpersonal activity that a closed office would hamper my job quite a lot.
I'm not minimizing the importance of communication, but I'm wondering whether the benefits you've cited are actually worth the costs to yourself and others.
A new head honcho is not long in post, and has decided to make his mark by moving the entire department into newly refurbished offices at a cost I understand that's about equal to 3 months salary per head. The plan is for long rows of desks so we'll have even higher density and less private space. I'm not optimistic for its effects on the department.
I finally realized that I can make more money freelancing on my own, since they charged $99/hr but only paid $15/hr. The levels of inefficiency at that job were staggering, and I muddled through for 3 years.
Now I am living the dream coding on my own and don't look back. The funny thing is, based on my pay stubs and commission, I know I was making them on the order of $100,000 per year. They only acted like they wanted me around...the day I gave notice.
If your employer doesn't understand these concepts, then you may have to think about finding other work with people who are more at your level. You won't regret it.
For someone else who asked about HH's desk location - yes, he actually moved from his precessor's private office into the bearpit. However he spends so long in meetings that he's very rarely at his desk. Which also helps to explain the new 'clear desk' policy that will leave the office looking immaculately tidy overnight for the cleaners, security and any burglars ;-)