I work on a network that supports around 400 users. The network was set up with separate VLANs for each of 8 floors plus one for the server farm and another for wireless. A L3 switch does all the routing between subnets. While segmentation was probably needed 10 years ago, I have been wondering if this continues to be the best design given that the VLAN assignment is arbitrary (based on location only) and since virtually every packet must cross VLANs to be delivered.
I'm consideing putting everything (except for wireless) on the same /23 network. With modern non-blocking switches, isn't a "flat" network design just as valid (other than for security considerations)? So far as I can tell, the major benefit to a segmented L3 design is breaking up the broadcast domain but they are no longer a significant problem in our network.