In my experience organizations aren't just flavor, or background, they're pretty much vital to a successful campaign. Every campaign that I've ever really enjoyed, either from the player or GM side, has had the PCs making major connections to organizations in the world. If a group truly wants to just kill things and take their stuff, well that's fine, but that had better be spelled out explicitly and clearly in the group social contract, the GM must create content that fits that agenda, and by golly the players had better be
actively and aggressively pursuing that agenda, not just saying that they want that agenda and then just dinking around.
The problem occurs when players don't express any innate interest in anything related to the game world, and the GM has a set of intricate organizations established in the backstory thinking that the players will interact with them. Most of the time the players generally ignore this kind of setup. Since the GM isn't really giving them what they really want (a chance to just go kick butt and get rich), the campaign just stalls out in this nebulous, half-baked "plot," everyone sort of just gets bored (including the GM), and things sort of implode and the campaign dies.
This has happened so often in sooooo many campaigns I've joined (including the one I'm in now), that as a GM I've just adopted the rule that all PCs will either be recognized members of an existing faction, or be directly aligned with a current faction. This is not optional, and I make it very clear to the players during Session Zero that this is the case, and if they're not interested in that, they should look for another group. In my experience this has been a significant boon to my campaigns, as it has created a much greater sense of player engagement and involvement.
One of the major "root causes" for me taking this approach can be found in an OP so eloquently stated by @
I'm A Banana (the former Kamikaze Midget) here:
http://www.enworld.org/forum/showth...ver-The-quot-Rootless-Vagabond-quot-Archetype