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.
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