YMMV, but my current workplace sits in a co-working space (although we are big enough to have our own exclusive office within it) and the noise levels on the common areas from what I have seen are ok most of the time. No music being pumped anywhere. The place described in the article sounds like a dystopian nightmare, but I doubt its the norm...
Also, if you are a freelancer or a tech founder that wants to work on his own thing, what is the alternative? Working on a coffee shop brings pretty much the same noise problems + no guarantee of power supply/fast Wifi. Working from home all the time can get lonely. Renting an office? Too expensive...so co-working spaces fill a nice niche.