If I can produce better results while playing games for 4 hours and working for 4 hours in a closed office than I could while "working diligently" for 8 hours in an open office, then it's hard to argue for the value of visually supervising someone.
Quantity #1: The price differential between the open space layout, and a good working environment for the rank and file.
Quantity #2: Total funds available for executive compensation.
Let's compare the two amounts and draw some lessons.
The cubes at my company are huge. If company policy here didn't forbid photography, I'd show you. I'd guess they're about 6 feet by 6 feet. I have plenty of space to stretch out and more desk than I really need. The cubes are even designed to be able to support a visitor sitting on a bench without crowding out the occupant (it's nice for having design discussions with my coworkers... we can both have a conversation in one cube without being nose-to-nose).
How do you sit on a bench for 8 hours a day?
Is this seriously huge nowadays? 75 square feet should be minimum. Or do you mean 6 feet by 6 feet of open floor with the remaining area covered by desks/cabinets/etc. ?
Practically speaking, cubicles solve a lot of the problems with open office floorplans. On the other hand, they introduce new issues. A big, silent cube farm can feel incredibly dehumanizing. Somehow a large open space feels more lively and human-friendly even if it's actually a way less efficient design for productivity.
Whenever I've worked in cubicles, I've always felt slightly resentful of the "office lords" who looked over the cube peons. It just felt like such a dehumanizing declaration of power and authority to have some people in fancy offices and the rest shoved into cubicles.
This directly leads to lots of office politics, as now promotions are not just promotions but also opportunities to get out of the cube farm. This realization might change every single aspect of your behavior at work. For instance, at one job, there was a manager track and a technical track for developers. They were supposed to be equivalent. But guess which one led to an office at the end and which one did not? They weren't equivalent at all in practice.
Getting rid of the offices and cubicles and putting everyone in a big open space can eliminate those feelings of resentment and anger and perhaps eliminate a lot of politics as well. But now we're back to where we started with open offices being horrible for productivity.
At my company, the technical track includes Architect as a director-level position, and they get their own offices just like actual Directors. I think that's even weirder. We have one architect in my department, and he has this giant office. It's one of the bigger offices in the area, even (about twice as big as the Director of Product Management's office next door). He doesn't manage people, and he spends most of his time designing software and writing code just like the rest of us. Going into his office is a really weird feeling, and it's outright surreal seeing my boss (who also has a cube, because he's a Sr. Manager and not a Director) go into his office to have a design discussion.
The other option of dealing with real estate constraints is to embrace a distributed work force in addition to an office in places where office space is a premium.