Hi everyone,
I was seeing the same problem, so after some googling, I found this thread. After some experimentation, I thought it might be helpful to others to add some observations after some careful experiments.
SHORT VERSION FOR THE IMPATIENT
iCloud and Dropbox aren't designed to solve the same problem. Attempting to use them that way may get you in trouble, depending on what you're trying to do. If you want to share content seamlessly across the Apple tools on iOS and OS X, then iCloud is your best bet. If you want to have a cloud-based file sharing solution, then Dropbox, Box or Google Drive are better tools because they were designed to solve that problem. iCloud was designed to allow Apple to ensure your content was available in their tools across all your devices. Anything else iCloud does is either a bonus or a by-product of that, depending on your perspective.
Pick your use case, and then select the right tool.
LONGER VERSION FOR THE CURIOUS
First, it seems like the "special" folders are related to sharing of information across iOS and OS X, because this is the scenario in which I originally encountered this problem. I resisted using the Apple productivity apps for a long time, but recently (and out of a bit of desperation), I started using Pages simply for note-taking and outlining to support my work instead of scribbling these things down on notepads. The benefit here was that I had a synchronized view across my Mac, my iPad and my iPhone so that I could use whatever device was handy, but still have a unified view.
Herein lies the issue, I think. I should also say that I've been in technology professionally since 1994, have done a lot of software development and seen and used a lot of different platforms, so my observations are based on this experience. I don't really have a clue as to what went on inside Apple during the design of these products, nor do I have any knowledge of how they work in practice. The rest of this post is only my educated guesses and opinions.
The purpose of iCloud from an Apple perspective is to really do only one thing: allow seamless information sharing of Apple-managed content across all your Apple devices. Period. iCloud may help you do other things, but it's really for Apple's primary use and control, not yours. This is why there's no iCloud app for iOS like Dropbox or Google Drive. This isn't what it's for.
The issue comes in supporting OS X and the desktop tools. When they decided how it was going to be integrated, they needed to figure out what made the most sense. The Finder is the primary way you interact with your files on the Mac. It isn't on a per-application basis like iOS, so the Finder is where the integration with iCloud has to go on the Mac. Otherwise, it wouldn't make sense, and you won't have the same unified view of all your files from the Finder.
As a result, you get to see the root of your "iCloud drive" on the Mac. That means you can use the Finder functionality to create files and folders as you would on the regular filesystem, and you can store anything there you want. My premise is that this is actually more by accident than design, because it's a by-product of the way the OS X integration is. From an Apple perspective, on OS X the primary iCloud integration point is the Finder, but there's no Finder equivalent on iOS (by design and for many reasons based on the way iOS's sandboxing works). If there was, there would be an iCloud app for iOS, or you would end up with a view of the entire iOS device like you get if you jailbreak your phone. The latter won't happen for security reasons, and the former won't happen because that doesn't fit with the positioning of iOS.
The only time this "Finder view" is actually exposed to you on your iOS devices is if you want to move things around. Open Pages on iOS and do the Move... command to see what I mean if you haven't done this before. Otherwise, you only see the pre-defined iOS application-specific view of your files.
Here's why I think you can't nest more than one level of folders in your app-specific iCloud storage: the UI of the iOS apps. I think this is really the only issue here, but the impact is extremely annoying if you're actually using the iOS apps relatively heavily.
If you create your nested folder using the Finder on the Mac (which is the *only* way you can do this that I've found, BTW), it will actually appear within iOS Pages in a similar way to the way your app groups are displayed on the home screens of iOS. You see a grey box with thumbnails of your documents in them when you view them from iOS Pages.
To try this, create a "Project X" folder using your Mac under pages and then copy one of your existing files in there, again using your Mac. Now you'll be able to see what I mean on iOS.
Using Pages on iOS, if you actually select the grey box, it opens a "drawer" in which you can see all your documents. Looking at the way this works, there's no UI support on the iOS version of pages to deal with multiple levels. They'd have to complete rewrite the app interface to deal with this, and it would probably become too complex to use (from an Apple perspective) on the device. Of course, Dropbox supports this kind of thing by presenting a single-level view of each current directory with an Up button, so it is possible. However, I think that's not what the iOS Pages design team was after. They wanted clean, simple and easy to understand user interactions.
Unfortunately, that also results in "annoying and limiting" user interactions when you've committed to actually using the application at any level beyond the simplest thing. So, it seems that it UI design for iOS that actually ends up limiting what you can do on your Mac.
Here's where it gets a little crazy, however. There seems to be a solution for this problem if you want, however it means that the UI on iOS will still end up showing you a flat view of your documents.
If you create a separate folder structure on your Mac at the root of iCloud, say "MegaCorp -> Project X", so there's two levels there, you *can* leverage this from iOS to actually organize your documents. The limitation is that it only presents this organized view to you on your Mac, and not on the iOS device itself, AND it only works if you create your documents on iOS instead of the Mac.
IF you create your document on iOS *first*, you can move it where you want it to be managed using the Move... command. However, once moved, it will still be presented at the top level (flat) in Pages on iOS. It just reads and writes from whatever location outside the pre-defined Pages root folder.
IF you create your document on OS X *first* within the structure outside the app-specific iCloud storage area, it will be invisible to the iOS application that can manage it. I haven't tried this yet, but I'm guessing that if you create Pages docs on Dropbox, you actually end up copying the document into the iOS Pages sandbox if you edit it, so you lose the cloud aspects and benefits of Dropbox and essentially fork your work in two separate storage locations because iOS Pages has no Dropbox integration itself.
Again, I'm guessing here, but I think that why this is the way it is happens for two reasons. The first is the UI presentation decisions made by the iOS teams I mention above, but I think the second is that this is a function of the way (or the accidental results of the way) the iOS sandboxing has been extended to integration with iCloud. The first one is the real issue to address, I think. I don't think the second is actually that important in this case.
Apple may decide to address this issue, or they may not. I went into this level of detail so you at least know the real limitations and impacts of this when you're trying to do real work. I agree that Dropbox is a more general solution (and I'm a happy user of the service), but I don't think trying to use the Apple apps with it across OS X and iOS will do what you expect. If you want to use the Apple apps across OS X and iOS, I think the above is the only option you currently have. Therefore, I think it's important that customers trying to use it to do real work besides tracking grocery lists or more complex "to do" lists should be able to make informed decisions before they commit to using a particular set of tools.
I'm still going to leverage iOS Pages for initial brainstorming, but there's going to come a time in my own workflow where my needs have outgrown the built-in support from the tooling, and I'll need to a) abandon either using Pages on iOS to expand, enrich and actually continue my work or b) avoid Pages (and other iOS apps) and find another option.
It's unfortunate that the tools aren't capable of growing with your needs, but that's been a software development problem for a long time. For those curious, check out the now long out of print 1991 edition of "Programming as if People Mattered." It describes exactly the issue above and why erring on the side of "ease of use" vs. "adaptability and power" means users will eventually outgrow your tools. The trick is finding the right balance.
I'm not sure the current balance is right for iCloud, but I hope Apple decides that it's important enough to address.
Hope this helps other people with the same issue.
Cheers,
ast
