I don't know, is there some fundamental reason it couldn't work on a larger scale?
Suppose these communities became popular, then some of the larger and more wealthy ones opened new franchises. Couldn't it grow?
Yes it could, as long as each community is small and they are independent. One of the problems with Communism is that those who govern "in the name of the people" usually govern for themselves and their friend. If a communist government is to actually work for the people, the place must be small enough for the people to know personally the government and vise-versa, social pressure keeping him from abusing his power too much.
The basis of all problems with government is simple, really. We have evolved to live in clans of, at most, 200 or so people--the largest number of people one can expect to know personally with some degree of affinity. We treat
those people as "friends"--those whose desires should be respected even when they contradict our own--and we tend to treat
everybody else as "strangers"--that is, those whose desires have no effect on us trying to satisfy our desires.
We lived like that for over a million years. Then the agricultural revolution happened, and suddenly, there were nations and tribes as well as clans. But we aren't programmed by evolution to such advanced thinking--it's been FAR too soon for that. We simply
do not consider the rights of others except for those 200 or so to be of equal status as our own.
The result? Whoever is in power will always tend to think of his family and friends first, at least to some degree, leading to a new aristocracy with titles such as "secretary general" or "general comissar of the workers" or "president" instead of "king" and "duke". Poof, there goes "treating everybody equally" and "liberating the workers from opression".
Communism fails because it asks the impossible from human beings--to treat strangers the same way one treats the family. This will simply not be done, no matter how wonderful the utopia it's supposed to create. Capitalism and Liberalism (in the traiditional sense) work, relatively at least, because they cleverly managed to ask from human beings to do what they want to do anyway--act selfishly and for their family's and clan's--as long as some "ground rules" that benefit everybody are observed.
It is not wonder that the "burgenois (sp?) family" is seen as the root of the problem to all the utopist ideologues (especially of the Marxist stripe). For it is indeed one's concern for one's family and friends that is the ultimate cause of the impossiblity of all their plans for a communal utopia where everybody is equal, no more war, racism, opression, blah blah blah, yadda yadda yadda. This, I suspect, is also the real reason for the attack on the "opressive" traditional family" by all the ex-communists turned "social activists".