It was probably not a mistake. It was to separate Hypertext from other files. The file: protocol still works in the a browser with a hostname as well. IE: file:///10.1.1.10/files/example.xlsx
I can't believe I didn't know that until now! I've personally used file: only to test local copies of static files/sites, and haven't had a need beyond that.
I wonder how the browser distinguishes between a file residing on a host addressable at 10.1.1.10, and the local path /10.1.1.10/files/example.xlsx. Maybe it tries one and then the other if the first doesn't work.
