I resonate with the article, though there are probably more precise ways to frame the phenomenon. It's not that students don't/can't understand the filesystem, but that it's not a central part of their mental model for working with a computing device. After all, it doesn't really need to be when I have an app-centric view of computing.

I teach an intro to networks once or twice a year with a heavy emphasis on Linux networking, and for the last three or four years, I've started the class with a brief primer on file system organization, home directories, and a few other topics that were never an issue for previous groups of students.

I don't think the main obstacle is conceptual as much as helping them understand that folder hierarchies, path variables, and related concepts are important details of the work so that they'll take the time to learn to use and navigate them effectively.