I like the idea of a kitchen diner - that open planness of it is reminiscent of the farmhouse kitchen, which was the hub of the house... most of the family would congregate there in a really lovely, sociable way. It would be possible to have most of the family there at once, with someone cooking, someone cleaning their boots, someone doing their homework or scrapbook at the table, someone polishing the brasses on the dresser, cat sleeping in the inglenook...
In modern days though, you do need separate places where people can go to do different activities that create some noise, it would be bedlam if everyone was in the same room playing a computer game, watching TV, doing trumpet/violin practice, doing some research online, frying bacon... gaaaah
Tell you what, though, I've always hankered after having a booth, like in an American diner. I would need a large kitchen diner for it obviously. Padded bench seats that lift up with storage underneath, going round three sides of a commodious table. So cosy.
I definitely wouldn't want all open plan downstairs, discrete spaces are needed to give everyone a break from other people, if nothing else. Besides, open plan tends to be echoey as it goes with hard flooring, painted rather than wallpapered walls, etc.