If you have read the Agile Manifesto clearly, they state that “we value Individuals and interactions over processes and tools”.
Does that mean that tools is not required for a Agile team?
Think about it, given the complexity of the modern world, do you think it is possible to ignore things like Audit/compliance, distributed team? Hence, there is still need for tools to compliment a agile dev team to make them even more agile.
My stand?
Continue to focus on interaction, but use tools (like TFS) to assist and faciliate the interaction.
My analogy:
A productive team is like a champion RPG game character. agile is the reflection of your “skills” and VS-TFS is the “legendary weapon”.
You can be fantastic in your skill only and hold a regular weapon, but you can never win someone who is fantastic in their skill and holding a legendary weapon that compliments their skills.
Check out the following article that addresses this topic 🙂
http://toolsforagile.com/blog/archives/795/do-you-really-need-an-agile-tool