It's no excuse for not having OPTIONAL expansion ability, but a lot of users don't understand how a file system structure works. From a user File Management perspective, it really is antiquated and should be kept totally separate conceptually from the Operating System and Application files used to run the actual system itself.
How many users do you see that just save everything to Desktop or scattered around the file system at random because they simply don't understand how file management is supposed to work?
File Systems are designed for Operating Systems to work, not for users to manage their files.
We need to kill folders - this isn't the 90s, we need a file management concept that works for users. Remember WinFS? That would have been the future