Corporations reduce the transaction costs between many actors, allowing large projects to be done with greater economic efficiency. This is also true for Valve. For a company their size, my guess is that they've found a much better way of collaborating efficiently than hierarchies.
Reduce? The larger the corporation, the larger the overhead introduced, and less efficient it becomes for intellectual work. Your thinking only applies to manufacturing.
Well, note that the size of Think Tanks is a lot smaller than the auto companies. However, there are still some things to be gained from the pool of talent at Valve. Gearing up a new team doesn't involve hiring. There's no paperwork. There's a lot of communicating (a good thing) and moving some desks.
