My hierarchy has general headings so I can see all of the parent folders in the sidebar. This requires the use of subfolders, and sometimes, sub-sub folders to keep things organized for all of the projects and collaborations that I have ongoing.
Almost everyone uses directory structures. I love PaperPile, but having all of the folders expand when PaperPile opens is a real hassle, particularly when I try to show people who don't use tags how to use PP.
I guess this must not be that popular as a feature request. It's a bit of a surprise to me.