Its a real pain when you want to inspect the files, delete or copy them.
Try taking 300,000 files and copy them somewhere. Then copy 1 file which has the size of the 300,000 combined. The single file is MUCH faster (its also why we usually do a tar operation before copying stuff if its already compressed). Any database that’s not a toy will usually lay the 300,000 records out in a single file (depending on settings, sizes and filesystem limits).
The 300,000 files end up sitting all over the drive and disk seeks kill you at run-time. This may not be true for a SSD but I don’t have any evidence to to suggest this or otherwise.
Even if the physical storage is fine with this I suspect you may run into filesystem issues when you lay out millions if not hundreds of millions of files over a directory and then hit it hard.
I have played with 1,000,000 files before when playing with crawling/indexing things and it becomes a real management pain. It may seem cleaner to lay each out as a singe file but in the long run if you hit a large size the benefits aren’t worth it.