I think this is because 9/10 people really only have a handful of files (lets say < 50, ignoring photos because they are usually managed by a separate app) that

I think this is because 9/10 people really only have a handful of files (lets say < 50, ignoring photos because they are usually managed by a separate app) that they ever deal with, so one "My Documents" folder with a sort by date option is easy enough to deal with. I don't think it's because people cannot grasp the concept of folders. Alternatively, look at email, where the volume to deal with is far greater. I would say that most Outlook users put their email into folder structures, and I have seen quite elaborate set-ups created by people that are not technical whatsoever.