As per my other comment, I've worked in an open plan for 6 1/2 years and I'd say our development team is pretty highly productive. I haven't seen any resulting hostility or stress, it certainly doesn't feel like an assembly line, and we get a lot of communication benefits from it.
Have you experienced/heard of such horror stories yourself? I'm guessing there are good ways to do an open-plan office and bad ways to do it, but I personally haven't seen any of the bad ways.
You've done it that long? How many people in the room? I've done it twice, with maybe 30 and then again with 20 people and hated it both times. Sometimes as a programmer you need to think.
I confess I liked one aspect, the feeling of being in contact with people, but it wasn't productive, I could almost always hear 3 conversations going at once. The worst was, packing people at long tables with laptops. Not even any place to put books. Teh shite, a triumph of cost-cutting and having Indians willing to put up with anything.
Probably for me, high-walled cubicles with not too many people in the same room is a good compromise.
We don't really pack people in or use laptops, we have clusters of 4 or 6 desks that form larger rectangles and which are then stacked back-to-back, so you can easily talk with the people next to/across from you in the desk cluster or you can easily turn around and talk with the people at the next cluster. We generally organize each sub-team as 2 or 3 clusters of desks, with 4-6 developers sitting back-to-back and QA and PM on the opposite sides of the cluster. It makes pair-programming much easier, since all the developer's chairs are in the same open area, so you can easily pair with someone to the side or that sits behind you.
My current part of the floor has maybe 35 people in it, and there's kind of four sides of a rectangle to the building, so overall there are about 140 people or so on the floor. Generally, the clusters are spread out enough that you can't hear conversations that are happening more than about 20 feet away anyway, so the primary conversations you'll overhear are from other people on your sub-team, which are exactly the conversations you really want to be overhearing anyway. It really helps to keep everyone on the team in the loop about what's going on.
We have offices around the perimeter of the building that are unused so that people can grab them to have impromptu whiteboard discussions or make phone calls, which also keeps the general noise level down.
Check out the classic book 'Peopleware'. They have several chapters with empirical evidence that the open-plan office is bad for software engineers (or anyone that needs to concentrate and work in 'flow' mode)
It sounds like your open-plan company was an exception though. Personally we have 50 people in our open-plan office and I hate it. I can't get into flow without loud music via my headphones.
Have you experienced/heard of such horror stories yourself? I'm guessing there are good ways to do an open-plan office and bad ways to do it, but I personally haven't seen any of the bad ways.