It's 2013 and you claim to not know what Aaron means when he says we've bumped into the limits of hierarchical organization, pointing at Google... You must've noticed the demise of 'hierarchical search engines' on the web?
Search is search. You can use a hierarchy to find things, but this scales badly. That's why computer science has moved on to other search methods - indexing and analysis of links between pages is what google used to do. Full text indexing, metadata-extraction, semantic analysis, tracking of user habits and explicit tagging is what Plasma Active uses. These technologies might be a tad more complicated than a simple hierarchy but they scale beyond the 1.44 mb floppy disk.
And again, in case you still don't understand it - nothing gets lost, as 'folders' (hierarchical or not) are nothing else than exclusive labels.
Note how Gmail (which uses tagging) works just fine with IMAP (which uses folders): mails which have multiple tags just show up in all the 'folders' in traditional UI's. Works just fine.