There are remote-only outfits, and they do fine - at least as well "We're not getting any work done because we're in an open plan office and we can't hear ourselves think" outfits.
But hiring policy is an issue, and so is PM. It needs people with a compatible attitude, and that includes management.
It's not that remote is a panacea, but it shouldn't be a showstopper either. There are plenty of productivity killers in non-remote work styles too.