I think I can tell you why noone uses that approach, because a lot are probably not aware of it. I never scrolled down to the examples in the SQL Server online books (at least not for CREATE DATABASE), where it's actually mentioned, and I think a lot of other people probably skipped that too. Some DBA told me sometime ago that it'd be impossible, so it was case closed for me that time. The bunch of books I read about SQL Server in the past didn't mention it either. So I learned something new today. Gotta try it as soon I get my RMA'd disks back.

About WinFS, I really hope they add real filesystem semantics to WinFS past Longhorn and pull NTFS out of it. Somehow the current approach looks like some evil necessary to me.