Update 2021-10-18

As of Chrome 95, on MacOS and Windows, --disable-site-isolation-trials remains a required flag in order to disable web security, so the command-line arguments to Chrome seen below are still valid. (Some of the arguments are not formally supported by Chrome, as it will warn you.)

To test whether you've successfully launched Chrome with web security disabled, run the snippet in Web Security Test at the bottom of this post.

Update 2020-04-30

As of Chrome 81, it is mandatory to pass both --disable-site-isolation-trials and a non-empty profile path via --user-data-dir in order for --disable-web-security to take effect:

# MacOS (in Terminal)
open -na Google\ Chrome --args --user-data-dir=/tmp/temporary-chrome-profile-dir --disable-web-security --disable-site-isolation-trials

# Windows (from "Run" dialog [Windows+R] or start menu in Windows 8+)
chrome.exe --user-data-dir=%TMP%\temporary-chrome-profile-dir --disable-web-security --disable-site-isolation-trials

(Speculation) It is likely that Chrome requires a non-empty profile path to mitigate the high security risk of launching the browser with web security disabled on the default profile. See --user-data-dir= vs --user-data-dir=/some/path for more details below.

Thanks to @Snæbjørn for the Chrome 81 tip in the comments.

Update 2020-03-06

As of Chrome 80 (possibly even earlier), the combination of flags --user-data-dir=/tmp/some-path --disable-web-security --disable-site-isolation-trials no longer disables web security.

It is unclear when the Chromium codebase regressed, but downloading an older build of Chromium (following "Not-so-easy steps" on the Chromium download page) is the only workaround I found. I ended up using Version 77.0.3865.0, which properly disables web security with these flags.

Original Post 2019-11-01

In Chrome 67+, it is necessary to pass the --disable-site-isolation-trials flag alongside arguments --user-data-dir= and --disable-web-security to truly disable web security.

On MacOS, the full command becomes:

open -na Google\ Chrome --args --user-data-dir= --disable-web-security --disable-site-isolation-trials

Regarding --user-data-dir

Per David Amey's answer, it is still necessary to specify --user-data-dir= for Chrome to respect the --disable-web-security option.

--user-data-dir= vs --user-data-dir=/some/path

Though passing in an empty path via --user-data-dir= works with --disable-web-security, it is not recommended for security purposes as it uses your default Chrome profile, which has active login sessions to email, etc. With Chrome security disabled, your active sessions are thus vulnerable to additional in-browser exploits.

Thus, it is recommended to use an alternative directory for your Chrome profile with --user-data-dir=/tmp/chrome-sesh or equivalent. Credit to @James B for pointing this out in the comments.

Source

This fix was discovered within the browser testing framework Cypress: https://github.com/cypress-io/cypress/issues/1951

Web Security Test

Run this snippet to confirm that this solution actually disabled web security in Google Chrome:

window.addEventListener("DOMContentLoaded", () => {
  const iframe = document.querySelector("iframe");
  iframe.addEventListener("load", () => {
    const canAccessIframeDocument = !!iframe.contentDocument;
    document
      .querySelector(
        canAccessIframeDocument ? ".security-disabled" : ".security-enabled"
      )
      .classList.remove("hidden");
  });
  // To ensure the `load` event always fires, only set iframe src after the
  // event listener is attached.
  iframe.src = "https://google.com";
});

body {
  font-family: sans-serif;
}

.hidden {
  display: none;
}

/* Web security should normally be enabled, so this is colored green, despite
   the objective of this solution to disable it. */
.security-enabled {
  font-weight: bold;
  color: darkgreen;
}

.security-disabled {
  font-weight: bold;
  color: darkred;
}

<h1>Web Security Test</h1>
<p>
  This test attempts to access the inner contents of a cross-origin iframe,
  which is normally disallowed.
</p>
<p class="security-enabled hidden">
  Web security is enabled. The cross-origin iframe document could not be
  accessed.
</p>
<p class="security-disabled hidden">
  Web security is disabled. The cross-origin iframe document was
  successfully accessed.
</p>
<iframe class="hidden">
  Iframes are not supported.
</iframe>