I get this, as I worked in a startup and saw how many of the early employees started to fill in leadership roles within the company. However, we had remote teams too and they worked out just as well. Our VP of Development for a long time was remote too.

I do agree that it's not optimal in every situation, and your culture has to adjust for it. I'm just saying, if there is a talent crunch, companies need to be willing to take steps to handle it. Distributed teams are one such option.