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Nu Cardboard has a far more pragmatic explanation of why developers stay with their familiar text file based approach to development:

The problem with text files, as with petrol engines, is that they are good enough. We are used to text files. We are trained to work with text files. All our IDEs, OSes and version control systems are geared to text files. Any other system for storing and manipulating source is competing with computing's technological and cultural heritage.

The funny thing is, Smalltalk sources are in files - they just aren't in a bunch of little files stored in a directory hierarchy (typically, although VW's parcel files are a lot like that). On the other hand, it seems to me that tools like VisualStudio and Eclipse are groping in the direction of image based development more and more - it will be interesting to see where they end up as they go that way.