Sure, I may be in a photo gallery and I may want to share a few photos with a friend who may want those photos to be treated as photos (instead of going into a big "Downloads/" folder). But it doesn't mean, at all, that the concept of file has to disappear to the user. In fact the files still very much do exist on the system. Product people just assume users are stupid, IMHO.
And the thing is: this abstraction (not knowing what a file is) doesn't make it faster or more efficient. It just makes the user more dependent on their platform and apps. Look at backups: product people at Google/Apple will tell you "people don't want to backup their files, they want to pay us to make sure that they never lose an image". Conveniently, it means that people are 1) forced to pay them and 2) don't have control over their own files.
Maybe GenZ/alpha now are stuck with these abstractions because they never learned what a file was (for no reason other than being abused by product decisions), but older generations grew up with physical media. "I have a piece of paper, I have a book, I have a CD-ROM, and those are all different kinds of files that can go into different "boxes" that are called folders".
Files and folders are very natural. The reason people don't know about them is because we hide them and force them to pay for literally subpar experience.