You are looking at this from the company’s perspective.
Try revisiting it from the employee’s perspective:
—Commuting costs time and money
—On site supervision means greater control by management. Lots of folks would like more independence during their day.
—On site means lots of meetings—most of them stupid—many of them just ego stroking exercises for managers
—On site means more claims of sexual or other harassment—why take the risk.
—On site often means noise levels are high—who needs that?
—On site in cities means a risk of crimes against person and property. Who wants to deal with that?
I am retired now, but I would gladly have turned down promotions if it meant I had to be in the office every day.
I was allowed to work mostly at home in the last few years of my employment—once you have done it going back to the office is just unthinkable.
Of course I’m looking at it from the company’s perspective. It is their company; their hiring/firing decision; their job that they are creating and making available. If the employee does not like the conditions of employment, they’re free to work somewhere else that comports with their sense of obligation to their employer.
I’ve worked in both office and home-office situations. I personally loved working at home. As you note, I had no commute, lower personal expenses, and certainly fewer B.S. meetings (except annual “compliance” calls we had to sit through, remote or not). I also was more productive. But I also knew the employer could change their mind on this arrangement at any point, and I’d have to conform.
You can also work a side gig from home. Which is what a lot of people are doing.