@markbodman I think that is the key question, and as I mention in my comment, since there are a variety of possibilities for distinguishing Offerings from one another (by function, by environment, by SLA, by location, etc.) the parent/child justification could be any one of these.  I provided an example where I use the TBM taxonomy to define the services for Backup and Archive, and then define Service Offerings based on function, but then if I want to have different treatments for those offerings managed by different regional service owners using different technologies, I am left in a lurch.

I do agree with the principle of keeping things as flat as possible, but with the addition of "as deep as necessary".  I think this is where the conversation needs to happen.  How to allow for the flexibility of going down a level if needed, rather than adopt a rigid model that only allows for a single flat layer.  There are clear scenarios where some level of depth is justifiable.