So can NTFS. In fact, you've been able to create paths with up to 32k-character file names per node since Windows NT 3.1. This is even available from Win32, and has been for a very long time: simply prefix your path with \\?\ and you're good to go.

The issue is that Explorer--and by extension, virtually every Open/Save dialog in every application--cannot handle paths longer than 254 UTF-16 bytes. I'm fairly sure at this point that Microsoft does that purely because they're not sure application programs can handle paths longer than 254 UTF-16 bytes (and they're likely correct), so they're trying to prevent users from making files that they can't open, but I find the entire situation absolutely infuriating. (In fact, as a Windows dev, it's really just that and the inability to delete open files that drive me bonkers on a regular basis at this point. Most of the rest I either like or have good workarounds for.)