They did when they fought in a forrest. It was called the battle of the Wildernes.
there have been several well-reasoned and well-written replies to the OP above. Nonetheless, letme take a stab at it.
The troops were massed becasue it was the only was to mass firepower. When you want to get ´X´pounds of lead in the same time, you can quickly determine the number of shooters you need. When you are using muskets, that number is pretty high.
A thin line of troops would have been cut to bits by a mass of soldiers (all armed with slow-firing, short-ranged muskets). Or to say it another way, the proposed tactic of spreading out would simply have not worked.
The other guys would have smashed such a line with firepower and would have simply walked over the remnants, accept the few causalities the thin line could have imposed upon them.
John Keegan’s A History of Warfare, IIRC, addresses the OP within historical context.
I’m not convinced of the firepower argument. If the troops were dispersed, you’d still have the same amount of lead going down range. In fact, wouldn’t spreading out you soldiers provide some advantage in terms of enfilading* fire?
The close order of the formation had to do with minimizing exposure to calvary—as noted above the formation doubled as a pike square. The close order drill and simultaneous firing was a product of the weapons—you couldn’t have one soldier firing while a second had his black powder exposed. That would be bad.
Again, please see Keegan. It’s a good read.
*I think that’s the word I want. Coming in from different angles so that it is harder to get cover.