It depends on what you're trying to teach, and what you're trying to assess.
If your goal is to convey concepts, or to teach the things that everyone needs to be able to do without consulting references in order to be productive, closed book may be entirely appropriate.
If your goal is to test their ability to combine and apply the concepts, open book may be more appropriate.
(And yes, I too remember tests with "official" cheat sheets as a balance between these. Then again, I also remember one test whose official cheat sheet was essentially a set of mathematical jokes, because the test itself didn't require any of the rote-memorization material. Then again again, I also remember closed book tests where one of the tools I used was a set of mnemonics that would let me quickly scribble out my own cheat sheet for the formulas/simplifications I most needed -- I can still recite "quasineutrality, uniformity, equilibrium, low-level injection, steady state" but I'd have to hit the books to again remember how those assumptions were used.)