Originally they were trying to do as Curtis mentioned. Files were to match documents, photos etc that might go in a file folder in a file cabinet. I guess the file cabinet was the computer.
Categories would work. But they are abstract and folders/files mapped to physical objects that were part of offices at the time. Recycle Bin/Trash, same thing, trying to map to real-world at the time.
I think the death of files is overrated though. I mean even on the touch os I can go to search and search for... files. No file browser like Finder or Windows Explorer work when you have a killer Spotlight like search.
