Filmmakers love a challenge, and shooting in one location is a surefire way to ramp up the tension. Set all (or a major chunk) of your action in one single location, it's just a matter of time before the characters turn on each other -- with dramatic results. When the locations are so limited, madness, paranoia, and great cinema often follow.
Last year we had "127 Hours" and "Buried." This year we can expect "Wrecked" (starring Adrien Brody) Did you know what other movies were shot in the confines of one location? ("Phone Booth" was one of my favorites)
Check out the article and clips on Moviefone about the one-location movies: (not for the claustrophobic!)