the argument isn't that flat organizations don't work, but that they're even more insidious than actual hierarchies. Zizek gives two great examples of the startup and the modern family. In the startup your boss is still your boss, except officially he's your friend, so you can't even hold him accountable, because there are no bosses. (political analog, traditional socialist parties, we're all comrades so better don't think anything wrong)

In the non-hierarchical family you aren't just ordered to dress up and go see grandma, you're guilt tripped into feeling bad about not seeing grandma, until you do it out of "your own volition". In the non-hierarchy you're not just supposed to be outwardly obedient but free on the inside, you're supposed to be obedient on the inside too. They work well, really well. Unlike the traditional hierarchy the tyranny is absolute because it has no borders and doesn't have to acknowledge itself.

>However the problems with traditional hierarchies are so well known

exactly, because they're visible. Valve, despite its utopian conditions, is weirdly enough, very secretive