I admire the streamlined look of riders who can fold at the hips with the spine nearly straight and flat.
But I suppose not all of us can do that, and it doesn't mean we can't have good position on the bike. Here is a rider who rides with a very humped lower back, but has accomplished a fair few things on a bike even so.
CFboy pointed out that it is more aero to have the forearms flat. I wonder if today the go-fast hammer position is with hands on the hoods and forearms flat, with the drops used when they need to ride fast for a long time, as well as for all-out sprints.
On century rides, I'll ride more than half the time in the drops, admittedly I don't have a big saddle to bar drop (maybe 3") and my back isn't completely flat either. It is a comfortable position for hours.
So, what stops you from getting all the way to a completely flat back? For me, my knees start to hit my midsection (yes, it is embarrassing to write that). My hip/back flexibility are fine, I'm just too thick.