My sense is that leadership making these decisions simply isn't really tuned into how engineering operates. And that's mostly it; they're focused on the business, and probably are dialed into the sales pipeline. And that probably leads to tons of questions and one-off-style clarification sessions where video chats and Slack just aren't great, to be frank.
At the same time, I do think there are significant tradeoffs between a remote team and a "shared meatspace" team. With remote teams, cross-team relationship building is really challenging, and I've noticed that there's a natural tendency to focus purely on your team. With all teams in a same physical location, it's easier to actually just pop by and clarify complex details. But, I did work at a place that got hundreds of engineers together about 3x a year, and that seemed to be enough to build significant bridges across the org.
Ultimately though, in my experience, these kinds of decisions are just because upper management is more aligned with sales organizations than engineering.