People and by people I mean architects and lead devs at big account orgs ( $$$ ) have been using S3 as a filesystem as one of the backbones of their usually wacky mega complex projects.

So there always been a pressure to AWS make it work like that. I suspect the amount of support tickets AWS receives related to "My S3 backed project is slow/fails sometimes/run into AWS limits (like the max number of buckets per account)" and "Why don't.." questions in the design phase which many times AWS people are in the room, serve as enough of a long applied pressure to overcome technical limitations of S3.

I'm not a fan of this type of "let's put a fresh coat on top of it and pretend it's something that fundamentally is not" abstractions. But I suspect here is a case of social pressure turbo charged by $$$.