- Software development using files and folders is absolutely antediluvian. Smalltalk does everything in a universe of objects; source code is organized spatially rather than in long reams residing in text files.
- Live coding and debugging done right is an enormous and unparalleled productivity booster.
- Persisting execution state is extremely convenient for maintaining continuity, and hence the high velocity of development.
Governments and enterprises have long used Smalltalk to write massive applications in large team environments using Smalltalk's own tooling for collaboration and version control. There's no question that historically Smalltalk has not played well with the outside (file-based) world, and this has been a major point of contention.
If you insist on using Git and similar tools with Smalltalk, then yes, this is problematic. The point is, if you view software development from only one perspective, you deny any possibility of improving the process in other ways that can lead to dramatically improved productivity, accelerated development, and lowered cognitive stress.