There are even applications for which hierarchical organization is entirely appropriate at the UI level: An obvious example is an outliner. And it's not a coincidence that our filesystem UIs have little icons of file-cabinet drawers and file folders: The real world features file cabinets and folders, and people have traditionally been able to make sense of those, hierarchy and all... in a context which naturally fits into a hierarchical scheme.
It's worth asking whether the cardinal sin of the hierarchical file system isn't the fact that hierarchical is innately confusing, but that for thirty years and more programmers have labored to fit non-hierarchical problems into a hierarchical paradigm, often in totally unnatural ways. Replacing that One True Paradigm with another One True Paradigm might just prolong the fundamental mistake.