They need a filesystem that can support the notion of users; very little of the software on ChromeOS runs as root for security reasons. FAT doesn't support the

They need a filesystem that can support the notion of users; very little of the software on ChromeOS runs as root for security reasons. FAT doesn't support the notion of file permissions on a user basis; so it would be insecure. ext4 is the most widely used and tested Linux filesystem at the moment. Therefor the least effort filesystem to use for your root filesystem is ext4. On external devices however you'd probably want to "squash" the users (all files are effectively treated as owned by the one user; the user/person who inserted the external device) and also mount with noexec and nodev; don't allow the kernel to run any programs on external devices (avoid malware, hacks etc), and don't allow device files to be used on external devices (you don't want someone to put a crwxrwxrwx copy of /dev/kmem on an external device and allow someone to access it; then an unprivileged user can read all of kernel memory).