I would say it's not just a POSIX demand. Most unix tools are POSIX-complaint, and the user should expect just it and nothing more. Non-proper text files without LF at the end may not be processed properly, so to be assured that everything works fine that LF is mandatory.
I like the idea of hard wrap, line of code shouldn't be longer than 80 characters... sure it's confusing for beginners + sometimes data shouldn't be hard-wrapped, but in general (imho) it's better than worse