Hmm. Current research goes into this direction. For example tracker or WinFS.

Personally I believe that we cannot easily resign from directory structure as:

• It is tightly connected with how computers file systems works and what programs expects
• Hierarchical organisation helps manage large number of files if there is strong separation. I.e. I have folders Projects, Music, University etc. which shares no files in common
• I guess that semi-power users (like *nix geek on windows) need to know the underlying structure easily. I gave up when I tried to do 'search for file XYZ.exe and delete the folder containing it' using standard tools in Windows 7.

On the other hand tags function better when the sets overlaps like:

• Photos of family, photos of buildings - where photo of my parents in from of monument belongs?
• Music
• Questions

If user is 'power-user' enough he might want to use hierarchical tags and form some ontologies. Those on the other hand can be simulated on *nixes by symlinks.

To conclude - in certain areas I prefer tags but not for all of them. Sometimes I need to know underlying structure. But probably as most other *** users.