Certainly. Why rent office space when you can commandeer your employees' private property?
This is the least of all expenses. Tech workers in SF can charge more because they expenses are universally higher. Remote workers in cheaper places can (and will) charge less.
Dropbox has 2500~ employees, and obviously this is just an anouncement. In some years we will have a clearer understanding of the tradeoffs.
My suspicion is that companies that will fully embrace the "internet way" of doing things will have success.
...and that managers don't need to be hovering around their employees in close physical proximity to make sure they do work?
Don't be so optimistic. The next thing you know SaaS business that let managers monitor employees will be all the rage.
I started using Hubstaff for time tracking for myself and a co-worker, and I was kind of disgusted that one of the headlining features they advertise is "the client will take a screenshot of everyone's screen at any interval of your choosing". Yuck.