You get the benefit of having multiple possibly giant workspaces. Imagine you're on a plane, you get the benefit of a 30" or cinema size monitor that you can look around without being limited to a tiny workspace.
It is a flat desktop because that is the most reasonable and quickest way to get up and running productively. I can scale it up and let users work as usual without inventing a new way for them to interact with their windows. Also, X windows and OSX don't give us the full tree of Windows so we can't accurately associate popups for example with their parent, so you'd have to have new windows and popups show up somewhere else. I did initially render the windows individually, so it is doable, but we'd still need a means of isolating input to each window, it's a definite possibility for Linux, and a weak one for OSX and Windows unless better support from the OS is released.
According to all the latest reports, there was no truth in any of the earlier reports.