"FAT32 was introduced with MS-DOS 7.1 / Windows 95 OSR2 in 1996" [1]
OSR2 fixed many nasty problems with the orig. Windows 95 which was released in the summer of 95. The next Windows 9x version was 98.
When I see people talk about Windows 9x I feel like they don't remember the negative. BSOD were common in Windows 9x. The first Windows version with which I've had a stable, satisfying experience was Windows 2000 (at work I did use some version of Windows NT 4; it could've been the network but it had quirks and was slow. Had to be early 10 min just to fire up computer).
[1] https://en.wikipedia.org/wiki/File_Allocation_Table#FAT32
Now everyone is reinventing wheels. poorly.
We could have way better than fat32 on cards. Ms and apple just don't want to make that any easier for you.
In other words, even if only Linux existed you couldn't have a universally R/W usb stick without FAT or NTFS.
But honestly i would be fine with ms making ntfs a free open standard so we can get better support for it.
Storage vendors are going to use the lowest common denominator because of all the older hardware out there that wouldn't work with a newer filesystem.
And most of the people buying USB thumb drives and whatnot are just going to use whatever the drive comes with.
Far worse is it that there is no good, unencumbered (looking at you CDDL license) version of UDF fsck.