Start-ups have been hot-housing like this for years. I have friends who went through YC who did it. PG even suggested in one of his essays "Ever notice how much easier it is to hack at home than at work? So why not make work more like home?" [1]

[1] http://www.paulgraham.com/start.html

This is just a scaled-up version of what has already existed for years. The reason it's not more common is because it's logistically difficult to organise. I doubt that difficulty will suddenly decrease. The majority of people will always have families or different lifestyle preferences.

So I'm doubtful that society will be "dragged down" to a point where this is the social norm.

Hence, I think that the opprobrium and derision in this thread is stronger than it needs to be.