Huh? The system hives live in %systemroot%\system32\config and the user hives live in the root of their profile. The system hive is split into like 5 different files, each named for the section they are. I'm not sure why you would want to look at the files, If you want to back them up there are better ways then a flat file copy, and if you want to delete them you aren't going to be able to because they will be in use.
Splitting the hives between the system directory and the user directory makes a lot of sense from a permissions perspective, to consolidate them would mean giving non-admins (able to write to their hive but not the systems) access to directory of files they can't edit and able to see the hives of other users. Putting it in the profile also firmly attaches it to the user it belongs to in a logical way. Either way other then data recovery or forensics, I've never needed to manual access the registry files, and no normal user ever would.
As for the lack of ability to clear settings, the cause is also a part of the solution. The cause is because admins running programs as admins can do whatever they want with the registry, because they are admins. Run a shitty installer, it spews shit everywhere, because it has admin rights and you ran it. The solution to shit in places it doesn't belong is to give an admin user the ability to use a program to modify the registry and change entries that don't belong. The registry cruft problem is entirely one of developer laziness, and you could have the same thing with config files just as easily. If MS forbade admins from modifying the registry in unapproved ways, people would scream murder, and actual admins (as opposed to retards running as admin) would have a legitimate point. A shitty program is a shitty program, nothing stops you from tracking the changes you make to the registry and undoing them 100% later, you could even store that info in the registry!. The registry also fully supports permissions, so you can fully control who can change what, put of course if someone runs a program as an user who has full access rights to everything, and that program writes all over everything, whose fault is that? MS gave you the tools, but you hung yourself. Don't like it, complain to whoever wrote the program, the OS did what it was told by an user with the access rights to do it, a situation could just as easily have happened with config files (and in the pre-registry days, it happened all the fucking time, which is why the registry was invented in the first place).
If you want to actually understand the reasoning behind the implementation of the registry, instead of blindly railing at it because you don't like the result when you let programs you don't trust do thing you dont want to it with wild abandon, look here: http://blogs.msdn.com/b/oldnewthing/archive/2007/11/26/6523907.aspx
The reality is there's nothing wrong with the registry as a design decision, and everything wrong with the security model of run everything as admins, but the reality is even though Windows gives you all the tools to run things NOT as admin, everyone does anyways, even people who should know better, and when they try to do anything to fix it, everyone calls them retarded and annoying because it gets in the way of running everything as admin.