We frequently hear people say they want a "telecommuting job", but we seldom (hardly ever) have companies say they want to do that. We think they don't hire new people into such roles because they don't know them.
Having the confidence to allow an employee to work at home without direct physical supervision or at least direct company observation is because:
1. Integrating yourself into the processes of a business takes time. A new employee has to learn what's expected, how to contribute, and where the limits are.
2. The company has to come to rely on you to do your job and a trust has to be built that you will work and get the job done from home without supervision. Since you are an "unknown entity", that trust doesn't exist when you first walk in the door. They have to see you do your job and the trust is build slowly to the point where it's finally OK for you to be at home and not physically present in their office. In the beginning, it's just not OK because they don't know you.
3. Synergy and team coordination and creativity happen when people interact in the same physical space. Many of the best ideas come from people talking to each other in the hallway, over lunch, in between meetings, etc. There is an increased thinking about the issues because you and your coworkers are working in the same space. Mentally, everyone is more real to you, the work is more real, the company is more real. Experiencing and contributing in reality is greater and has a bigger impact than contributing virtually.
Some companies are bringing their telecommuting people back into the office because they find the company culture is being destroyed, that creativity is lacking, that the company has lost steam since everyone isn't working in the same space.
It can be harmful to your career development because you don't get to see people being managed, problems being handled or solved, company organizational structures and how they work, production, etc. You end up not personally being groomed for higher positions because of a lack of exposure to those things that will help you grow into new roles.
Can you actually be more productive at home? Yes. There are jobs where you can do your part (if you already are well trained) better at home than at work. But there is still those missing ingredients mentioned above.
Already telecommuting? Then you probably know you are one of the very few doing it and that it may or may not be available again when/if you have to change jobs. Yes, overall there are more people than ever telecommuting, but it remains a very small fraction of the total workforce.