For example, the product images in the media folder are stored in folders by the first 2 letters of the image name. What is the advantage of creating 2 level subfolders?
Magento was developed with the aim to work with big databases. Keeping your images in or folder or subfolder could cause problems, as even any FTP client has limitation on the amount of images reflected and if this limit is exceeded, you won’t be able to see those images.
Magento decided to develop the system of uploading images to prevent the mentioned difficulties. Besides, showing images from the folder where there are 100 images, it is more problematic than in case when in the folder there are 1 or 2 images.
Can you please specify why this logics of images placement bothers you? Do you face any issues with that? If yes, let me know, so I could possibly assist you.