Drywall is such a pervasive building material today that it's almost impossible to imagine building a house (or office) without it. It wasn't always that way. Drywall has only existed for just over a century, and didn't become the normal way of building interior walls until after WWII.
Think about the "drywall" term for a minute. Ever think what it really means? Yeah, that's right - it works fairly well… so long as the wall is dry. But leave the window open while a summer shower blows in, or let the roof leak, and "dry-wall" turns into "wet-mush." One dousing of water, and it's a moldy, mildewy mess. You have to rip it all off, down to the studs, and rebuild the room. So the slogan should be "dry-wall or mush-wall"! And remember the Chinese Sheetrock Disaster recently… it doesn't necessarily even need to get wet to breed mold and mildew.
Simply put, drywall can't endure imperfection. Not only does it fail when a bit of moisture causes it to breed disease-causing mold and mildew, but it's really fragile in other conditions as well. Have a couple teenage kids that like to horse around? Chances are, they'll probably smash a hole in the drywall before too long. Bump the vacuum against it a bit too hard? You'll knock its paper face off. Try hanging a picture and can't find the strength of a wood stud behind the powdery drywall? You just may make a real mess of things.
There is a better way that doesn't cost so much more, and we've started to improve it for today's needs. Ever been to a little Atlantic beachfront cottage built before WWII? You might remember that the walls were sheathed in wood boards, and often left open on one side so you don't need wood on both sides of the wall. Really charming. And really useful as well. You can hang a picture, attach a peg, hang a cabinet or a shelf, and never have to worry about whether it's solidly attached. And you can actually build shelves within the wall as well, so that you're using ever cubic inch for storage instead of the hidden cavities of drywall-sheathed walls that breed mold and mildew when wet, and house roaches and mice.
Some immediately protest "but what about the acoustical privacy?" What about it? Who is in the house with you? Your kids? Do you really not want to hear what your kids are doing? OK, maybe there are some times you don't… like when you're already in your bedroom for the night, but the need for acoustical privacy elsewhere in a house is dramatically overblown. If we're talking about a powder room just off the living room, then yes, you probably want to insulate those walls. But most other walls don't require insulation so much as we might think.
I should note that we tried - and failed - to build drywall-free walls recently. Wanda and I designed the Coastal Living Idea House this year, and it was designed with many of the walls open. The developer was cautious about it because he had never built anything that way before, but he agreed to do it… all the way up to the point when the drawings were finished. But once the decorator (who had never done it before, either) got involved, her influence was just enough to tip the scales against it. So if you're planning on doing this, just be aware that the deck is stacked against you because everyone you work with will be in unfamiliar territory, and the unfamiliar makes people nervous. But the usefulness and charm you get in return for a few extra dollars is well worth it, and how can you put a dollar figure on a healthier house for your family?