But no-one is suggesting that we actually get rid of the underlying files. They'll still exist, so different programs can still exchange information that way.
The problem is more centered on the idea that a document is pretty much useless without the application that can read it. So why not make this link explicit?
Case in point. A friend of mine is in a band - they've just released their first album. Whilst trying to drum up some buzz, they distributed one of the songs on the album as an .mp3. Trouble is, the guy exported the song as an AAC, but he named the file blahblah.mp3. Then, iTunes and WMP both refused to play the file because the format didn't match the file extension. This sort of error should just plain flat out not be possible. It's a song, not a file, and it should not be possible to create grief by stuffing up the name of the object as the computer sees it.
I reject this idea completely. Files are powerful because they let me manipulate the same object in many different programs.