Parasites need hosts close by.
Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.
Having spent 40 years in Fortune 500s R&D and large education institutional research environments, I completely understand the purpose of the above directive. Absolutely nothing makes parasitic managers (especially those with little to no technical understanding) more nervous and fearful for their jobs - than not have constant access to the creativity and productivity of their underlings - which they can claim as their own to their superiors (including boards) - therefore and apparently justifying their existence. Nothing more, nothing less.