While I agree with everything you say, there's an issue you may have overlooked.
While modular office space is expensive, once you own it, you can rearrange it. Once you put up sheetrock, you're stuck with it. Also, converting a cube farm into sheetrock offices makes the entire office space seem a maze of corridors and doors. This is usually not a desired effect when you want to show someone your office building.
Like it or not, thanks to the Scandinavians and a few other "designers", wide open office space is "what people like". I like a small, dark, warm office. But, after walking into IBM buildings in Raleigh, I can appreicate the negative psychological impact that the corridor maze *does* have.
It's a two edged sword, in many respects. Programmers get the environment that most of the them want, but it does make for a "us vs. them" type office environment. I don't think it's the cause, but I do think it encourages departmental isolation, staking out of territory, etc.
You also run into the issue that you want people to *feel* that they can communicate readily with their co-workers. Among people in the same discipline, this isn't much of a problem (programmers to programmers, hardware guys to hardware guys, etc). But when you walk into the corridor maze looking for the hardware guys, it's a lot less friendly feeling than the open cube farm. And then there are the people with their doors always shut (that would be me).
I've worked in both enviroments. While I prefer the private office by far and large, from a management standpoint, and a building facilities standpoint, I can see the value of cubes. I don't how many times at Hayes we went through re-cubing. But I know it was a helluva lot cheaper than building new walls. Not to mention, you *can* take it with you when you go...
One final note I just remembered. Depending on who owns the building, they may or may not want the build out. Depends on your lease, the location, etc. Most people leasing buildings will permit buildouts, but sometimes this is not the case.
--Chris
e-mail jcwren