Defining the TDS required many compromises. Both the overall structure and the names of the individual directories were arrived at by finding common ground among many opinions. The driving forces were achievability (in terms of what could technically be done and what could reasonably be expected from developers) and regularity (files grouped together in an arrangement that ``made sense'').
The arrangement actually adopted tends to spread files out into two or three places (macros, documentation, and fonts, for example, are spread into different sections of the tree right at the top level).
The TWG settled on the format/package arrangement after long discussion about how best to arrange the files.
The primary alternative to this arrangement was a scheme which reversed the order of these directories: package/format. This reversed arrangement has a strong appeal: it keeps all of the files related to a particular package in a single place.
In the end, the format/package structure won for a couple of reasons: