Funny enough, we're a small company here (8 employees at this location), and I simply told them we couldn't afford a cleaning crew [a], that if they wanted to live nearly a third of their life in a dirty, disorganized environment, that was their choice. The bathrooms stay clean, the kitchen has the dishes washed every day, and every Friday they spend an hour scrubbing the place. No one is forced to do it, yet everyone takes pride in their workplace and wouldn't stand for a customer or someone else to judge them.
(Mind you, the engineers who are used to having someone clean up after them have taken longer to pitch in - but they all eventually join the party. =)
It's worth noting, that we're not "flat" as far as structure goes, there's an operations manager as a foreman, and there are two of us partners at the top who set clear directives. However, we let anyone do anything they find interesting - the key is that they must -do- and not -talk-. If someone has an idea, they can get it done as long as they meaningfully contribute to it and shepherd the process - produce mechanical designs, circuit design, software, or simply make new jigs to make an assembly process more efficient. If they can show me they tried to make something and failed because tooling was inadequate, I buy a new machine for them.
But, yes, I agree it does only work under certain specialized circumstances: it works best at small companies that don't have a lot of interaction with enterprises. =) Trying to sell or work for an enterprise largely requires you to behave like an enterprise as well.
Smoke and mirrors? At the end of the day, even in the most lauded cases, someone has to write the check or pay the consequences. They always have a veto.
[a] - Originally, I had offered anyone the same rate as a cleaning crew to take on the responsibility. No one bit.