Here is a link to 7 tips Microsoft provides to help make the working experience for staff members productive. In my opinion the biggest factor that has stopped this becoming a reality for many employees and employers is the PROCRASTINATION BEAST.
While the tips that Microsoft provide, procrastination is still in my opinion the biggest killer to home based employees. Because their time is paid for by the employer, the employer can rightly expect the same level (or in theory more) productivity from home based workers. But at home it is easy to become distracted.
One day this phenomenon will become more common place, until good systems can be wrapped around it though it will remain a rarity among companies, rather than the norm.