1. To maximize Photon's battery life I tried to make the hardware do the absolute minimum to record imagery. To that end, Photon stores images on an unformatted SD card (ie one huge linear array of bytes) which is easy and fast to index into.
2. A 16-bit MSP430 handles writing the image data, and the MSP430's codespace is 99% exhausted without dealing with the complexities of a filesystem like FAT32, so adding support for a filesystem wouldn't currently fit. (This line of MSP430, MSP430FR2433, has a maximum of 16 KB of FRAM, but perhaps I could use a different line.)
3. Photon stores images as RAW image data that require post-processing to view the images. Since I wanted to provide a polished app to view the imagery anyway, I figured I'd just make it a requirement.
I'm not saying those are all particularly good reasons, but that was my reasoning anyhow.