NEW YORK (FORTUNE Magazine) - Robert Oppenheimer agonized over building the A-bomb. Alfred Nobel got queasy about creating dynamite. Robert Propst invented nothing so destructive. Yet before he died in 2000, he lamented his unwitting contribution to what he called "monolithic insanity."

Propst is the father of the cubicle. More than 30 years after he unleashed it on the world, we are still trying to get out of the box. The cubicle has been called many things in its long and terrible reign. But what it has lacked in beauty and amenity, it has made up for in crabgrass-like persistence.

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Reviled by workers, demonized by designers, disowned by its very creator, it still claims the largest share of office furniture sales--$3 billion or so a year--and has outlived every "office of the future" meant to replace it. It is the Fidel Castro of office furniture.

So will the cubicle always be with us? Probably yes, though in recent years individuals and organizations have finally started to chart productive and economical ways to escape its tyranny.

The cubicle was not born evil, or even square. It began, in fact, as a beautiful vision. The year was 1968. Nixon won the presidency. The Beatles released The White Album. And home-furnishings company Herman Miller in Zeeland, Mich., launched the Action Office. It was the brainchild of Bob Propst, a Coloradan who had joined the company as director of research.

After years of prototyping and studying how people work, and vowing to improve on the open-bullpen office that dominated much of the 20th century, Propst designed a system he thought would increase productivity (hence the name Action Office). The young designer, who also worked on projects as varied as heart pumps and tree harvesters, theorized that productivity would rise if people could see more of their work spread out in front of them, not just stacked in an in-box.

The new system included plenty of work surfaces and display shelves; partitions were a part of it, intended to provide privacy and places to pin up works in process (see photo, above left). The Action Office even included varying desk levels to enable employees to work part of the time standing up, thereby encouraging blood flow and staving off exhaustion.

But inventions seldom obey the creator's intent. "The Action Office wasn't conceived to cram a lot of people into little space," says Joe Schwartz, Herman Miller's former marketing chief, who helped launch the system in 1968. "It was driven that way by economics."

Economics was the one thing Propst had failed to take into account. But it was also what triggered the cubicle's runaway success. Around the time the Action Office was born, a growing breed of white-collar workers, whose job titles fell between secretary and boss, was swelling the workforce. Also, real estate prices were rising, as was the cost of reconfiguring office buildings, making the physical office a drag on the corporate budget. Cubicles, or "systems furniture," as they are euphemistically called, offered a cheaper alternative for redoing the floorplan.

Another critical factor in the cubicle's rapid ascent was Uncle Sam. During the 1960s, to stimulate business spending, the Treasury created new rules for depreciating assets. The changes specified clearer ranges for depreciation and established a shorter life for furniture and equipment, vs. longer ranges assigned to buildings or leasehold improvements. (Today companies can depreciate office furniture in seven years, whereas permanent structures--that is, offices with walls--are assigned a 39.5-year rate.)

The upshot: A company could recover its costs quicker if it purchased cubes. When clients told Herman Miller of that unexpected benefit, it became a new selling point for the Action Office. After only two years on the market, sales soared. Competitors took notice.

That's when Propst's original vision began to fade. "They kept shrinking the Action Office until it became a cubicle," says Schwartz, now 80. As Steelcase, Knoll, and Haworth brought their versions to market, they figured out that what businesses wanted wasn't to give employees a holistic experience. The customers wanted a cheap way to pack workers in.

Propst's workstations were designed to be flexible, but in practice they were seldom altered or moved at all. Lined up in identical rows, they became the dystopian world that three academics described as "bright satanic offices" in a 1998 book, Workplaces of the Future.

Designer Douglas Ball, for instance, remembers the first installation of cubicles he created for a Canadian company in 1972. "I thought I'd be excited, but I came out depressed," says Ball, now 70. "It was Dilbertville. I'd failed to visualize what it would look like when there were so many of them."

Having taken over the world, the cubicle defeated several attempts to dethrone it. One of the most ambitious assaults came in 1993, when Jay Chiat, chairman of ad agency Chiat/Day, declared a sort of Bolshevik revolution when he moved his employees into newly renovated space in Venice, Calif. The design "was loungy, like Starbucks," remembers Stevan Alburty, then head of technology. "It was 20 years ahead of its time."

But it had a fatal flaw: No one had a fixed place to work. Employees were expected to park their belongings in lockers and check out laptops every morning as if renting a movie at Blockbuster. It quickly sparked a counter-rebellion--many employees simply stopped coming to the office, preferring to work at home. After the firm was acquired by an advertising conglomerate, employees got workspaces again.

Designers since then have mostly limited themselves to trying to offset the cubicle's most glaring defects. A recent Steelcase offering, the Personal Harbor, can be fitted with its own lighting system, fan, door, and window. Knoll offers the A3 (or anticube), a colony of rounded, podlike structures with translucent mesh coverings for privacy.

Herman Miller, now a $1.5-billion-a-year company, will launch two concepts in June that are the work of designer Ball. He says the new designs are the culmination of more than 30 years of trying to undo his early mistakes. The company won't release many details, but the systems will emphasize color and privacy; Ball says the workstations will be "more capsule-like, or cockpit-like." In all, more than 100 cubicle-variant office systems have come to market over the past three decades.

When openly challenged, the cubicle still gets the last laugh. In California state-employed attorneys obtained relief from the cube through Title 13.3 of their union contract: "The State agrees to make a reasonable effort to provide private enclosed office space to each permanent full-time attorney who has confidentiality needs." Should an attorney be assigned to "other than enclosed private offices," the union must be notified. Rather than violate the rule, says union president Holly Wilkens, the state sticks some young attorneys in airless closets.

Is that really where we're headed? No, says Stewart Brand, co-founder of the Global Business Network, an Emeryville, Calif., consulting firm that helps companies make long-range plans. Back in the '60s, right around the time Propst unveiled the cubicle, Brand created The Whole Earth Catalog, which became the bible of environmentally aware living and arguably had a much more benevolent effect on American culture.

He says that the most productive people he knows have developed ways to work outside offices, not in them. Brand himself worked out of a converted shipping container in Sausalito for seven years and now commutes to a beached fishing boat a few yards from his house. He sees two workspaces rising up to compete with the modern office: homes and what might be called the third space--i.e., Starbucks.

A living example of work in the third space is Diego Guevara, a 23-year-old appraiser for a large mortgage and insurance company. He camped out on a recent winter afternoon in a Manhattan Starbucks; before him on the counter were his ruggedized computer, a calculator, a Wi-Fi card, a yellow pad, and a grande.

As he used a PDA-cellphone to check on a property, Guevara typed details of the morning's appraisals into the laptop, which would sync the records with a database back at the office in West Orange, N.J. He usually goes to the office only when he needs supplies. And the last time he saw his boss? "Before Christmas," said Guevara, adding that his boss mostly works at home.

If working at home is now part of the zeitgeist, one very large employer that seems increasingly tapped in is the U.S. government. Congressman Frank Wolf, a Republican whose Virginia district is home to many federal worker bees, has made telecommuting his pet project. "There is nothing magic in strapping ourselves into a metal box every day only to drive to an office where we sit behind a desk working on a computer," he told a congressional committee.

Wolf sees telecommuting as a way to decrease traffic, reduce air pollution, increase productivity, and frustrate terrorists. In 2004 he launched a campaign to penalize government agencies by docking funds if they fail to support telecommuting. Now the SEC, the State Department, the Department of Justice, and four other big agencies are required to offer every eligible worker the opportunity to telecommute.

A 2005 survey by Milwaukee's Dieringer Research Group reported that 26 million Americans use broadband to do work from home. Sales reps and consultants have always worked remotely; now finance people, lawyers, administrators, researchers, and creative types can too. Just as infotech has enabled companies to offshore white-collar functions, it also untethers Stateside employees from their cubes.

Coming to the office for meetings and in-person collaboration is still important, of course, but as Brand points out, "People are realizing they don't need face-to-face time all the time."

Remember how economics helped turn the cube into a plague? Now giants like Cisco Systems see "workforce mobility" as a way to cut real estate costs. Thanks to heavy use of mobile technology by employees, says real estate VP Mark Golan, "we discovered that Cisco offices and cubicles went vacant 35% of the time."

By switching to what it calls the Connected Workspace--employees set up work areas wherever they are needed in the building--Cisco says it has raised satisfaction while boosting density. Now 140 employees are able to work comfortably where 88 would work in a traditional workspace.

Hewlett-Packard, which has introduced a similar scheme, expects to cut $230 million out of annual occupancy expenses by mid 2007. The new economics of the office won't actually kill the cube. In fact, U.S. sales of office systems rose 11% in 2005. But as the office occupies a smaller part of companies' budgets, cubes will claim a smaller share of employees' lives.

FEEDBACK: jschlosser@fortunemail.com

REPORTER ASSOCIATES Doris Burke and Abrahm Lustgarten contributed to this article.