Depends.
ONE THE ONE HAND, in my experience drama seems to go hand in hand with lack of strong leadership and ability to light a fire under people's rear ends by painting an inspiring "end result of our hard work" mural. It's like that show on National Geographic Channel, "The Dog Whisperer." Strong presence and ability to focus the group, no problems. Lack of strong presence and ability to manage group focus ... dog pack gets nervous and soon all anxiety gets released by individuals blowing up at each other for the most ridiculous slights, real or (in most cases) perceived. Same thing in monkeys.
I'm not saying people are dogs or monkeys but we are mammals and that aspect of individual/group dynamic behavior seems to have been ingrained in our genetics as a result of who knows how many years.
Strong leaders with big visions and the ability to communicate clear plans to people so well that people think it was their own idea can crush petty squabling instantly; I've seen it too many times to not believe it's a repeatable skill and obviously one of value (who knows where that startup you mention might have went if the participants learned to grow up and work together?).
"Personality conflicts are not something you can work around by force of will."
I think it depends on the individual maturity and the power of the idea and the money at hand to figure out if you can work around pesonality conflicts at will.
Don't tell me if you didn't get along with someone but I came and told you, "If you guys can shutup and work together and finish this feature by the end of the week, Google will buy us for $10,000,000,000" that you wouldn't immediately shutup and make friends and get to work.
Of course you would - so it's a question of mental attitude, not operational impossibility.
What's more important, your ego or the company. I'd hope ALL founders would say, "The company, because if the company takes off I benefit more than being right and makign the company flop."
Honestly I'd rather work hard with someone I couldn't stand personality wise and score and then spend the rest of my life upgrading my "WhySo-And-So-Is-Stupid" blog than arguing and cancelling the startup.
Anything else is amateurish and childish. I mean if your coworker fed kittens to Rottweilers or something horrible like that, well that's one thing. But unless it was something like that,please. Grow up. There are millions of smart programmers all over the world who'd cut a leg off for an opportunity to work in a possibly very successful startup where the biggest issue is "I don't like the guy sitting on the other side of the room."
As for your assertion that "If you don't like the people you're workign with, you're not going to be doing your best work."
I disagree. Maybe YOU're not going to be doing your best work but I've been in a startup situation where I loved eveyrbody and I met some unbelievably talented technical guy who wanted me to jump ship and join him instead. He was a certified genius but possibly one of the rudest pricks you can imagine. Every day long after I stopped communicating with him, for like 3 months, he would send me long emails along the lines of, "Let me tell you why you're messing up and what you're doing wrong and what opportunities you're missing and how you can improve this and you should stop that because that feature is stupid." and so on.
Funny how easy it is to confuse "I like my cofounders and they like me" with "we're making incredible progress ridiculously fast."
At first I thought it was a no-brainer to pass on working with genius guy because he was such a jerk I thought it would be impossible to come to work with him every day, even if he personally wanted to invest the first million out of his first pocket.
"No thanks, I have VC interest, I have a team that I get along with, stop emailing me please."
As I've grown older I've come to realize that that guy was like the character "Mickey" in Rocky: He's nasty, he's mean, he's rude, he's abrasive, he makes you hate to go to the gym and get in shape for the big fight. But a few months with him will leave you much better off than hanging out with people who like you so much that it's all easy breezy.
You might disagree, but I personally respond best to jerks ticking me off and tend to relax and get a false sense of security when I spend too much time with yes-people who I get along with really well.
In ANY creative process there has to be a balance between "flow" and "tension" ... too much tension and the venture cracks ... too much flow and not enough tension and soon you're drifting off in many directions and not getting anything done.
I don't know if startup situations tend to attract manic-depressive types or if they make normal people tend to act manic depressive, but I'm sure I don't have to tell you that many startups have manic-depressive atmospheres.
One day you're going to sneak up like a ninja, crush everyone before they wake up and run off with all the loot while you're playing Queen's "We are the Champion" or House of Pain's "Who's the Man?" in your head.
Next day, you realize you've made a HUGE mistake in quitting your job and you suddenly come to the stark conclusion that you're all doomed, completely DOOMED and what were you thinking?
Then there's a breakthrough and you renounce your humility and realize you're "this close" to taking over the world again. Then tomorrow you're at the pit of despair again. Day after that you're making plans to dynamite your URL on the moon's surface. And so on.
Until that twilight period gets stabilized, which may take weeks or months or close to a year or in some case more than a year, you'd be surprised how useful hostility and anger and resentment can become if you can direct that properly. Sometimes it's all you have when things are bleakest and you need something to keep the fire going.
So to synthesise our arguments, you need people to get along well ... but never too well. All creative acts attract "artist types" and artist types thrive when they have a "I'll show you, I'll show you all!" attitude, not when it's like, "Hey, massage my feet? Sure!"
Need breakfast fuel gotta go.
Just my 2c.