I think LOC probably works OK as a very crude metric until you start to measure it. Once you start to measure it all hell breaks loose. If you measure me on lines of code, well I can get you lots of lines to code. No problem at all...
I seem to recall a quote from some computer scientist, possibly Knuth but I'm not sure, that went something like 'You optimize what you measure.' So if you measures LOC, you get LOC... and far more of them than is by any reason 'necessary.' Really a horrendous metric.
