Users do not know what a filesystem is. They don't want to know. Whilst the improvements enumerated here are undoubtedly improvements it's all lipstick on a pig. It's time for the hierarchical filesystem to die.
2. Type what you want to find.
3. Profit!
I think that tailor made libraries that leverage metadata are the other part of the answer. All modern music players and photo library apps already do this, they have a tailor made interface specifically for browsing music and photos. It’s not necessary to ever touch a music file or a photo in the file system.
The obvious problem are files you want to use in several applications – e.g. that CSS or JavaScript file you are working on. It wouldn’t make sense to give every app a library, that would only confuse and lead to inconsistencies.
I do think, though, that this is a problem most casual users will never encounter. Just add a document library to Office and most people would be set.
Anything can be built on top of hierarchical filesystem. Windows already has libraries. Some alternative file managers support file tagging and user catalogs.
It's apparently hard enough that no one's been able to provide a better solution to the general problem yet, only specific instances. (No, the iPad doesn't count because it doesn't even have a USB port.) So instead of researching pie-in-the-sky solutions (which is incidentally what MSR does), they've decided to invest resources in something that we know works to the extent that it does.