The TWG settled on the format|/|package arrangement after long discussion about how best to arrange the files.
The primary alternative to this arrangement was a scheme which reversed the order of these directories: package|/|format. This reversed arrangement has a strong appeal: it keeps all of the files related to a particular package in a single place. The arrangement actually adopted tends to spread files out into two or three places (macros, documentation, and fonts, for example, are spread into different sections of the tree right at the top level).
Nevertheless, the format|/|package
structure won for a couple of reasons: