I think it was just too early in the project for that. Images were still considered a nice-to-have and (as far as I can tell) HTML hadn't even been proposed yet. It mentions the potential for a markup language, but it also says that they don't want to force users to adopt any particular markup language and mentions word processed documents as a potential node format. Perhaps the assumption was that specialized formatting requirements would be handled by specialized document formats, with markup pages acting as glue for listing and navigating between those formats (similar to how most browsers now have built-in PDF readers).