Better also depends on the device. When using the 505, the single level folder is not a real problem, since I have a database to lean on. If I want a mystery I just plug the tag into search and then copy it to the device with Calibre.
The problem arises when I'm using a different device. A Nokia, or perhaps my Treo 700P if I can find an epub-capable reader for it. There I'm stuck browsing through all those authors trying to remember who wrote what
It's totally analogous to what you'd find in a brick & mortar library. Sure you have a database (or a card catalog), but you still have the shelves organized for easy browsing.