Part of this has to do with supporting historical practices. The Files app is relatively new. Before Files there was iCloud Drive, but pre-iCloud Drive, the only way to save an iWorks document to iCloud in iOS (or documents from any app that uses iCloud) was to enable that app individually in iCloud settings. To this day, the app-specific default folders in iCloud Drive are created the first time that app is enabled in Settings > iCloud.
That original iCloud approach of app-specific folders also echoed the sandboxed data structure in iOS - each app's data is stored within that app's sandbox/silo/container. The natural extension of that was to duplicate it in iCloud - sandboxed on iPhone = sandboxed in iCloud.
Today, Files app and iCloud Drive gives us more options. As long as iCloud Drive is enabled in iCloud Settings you can access iCloud in the Files app and access any folder that's ever been created there or create new, regardless of whether that app's enabled individually in iCloud Settings.
You can certainly create your own Pages folder (or call it whatever you wish), but someone who has been using Pages since before the Files app existed already has that default folder. Plenty of people are accustomed to the historic default arrangement and don't bother with Files on a day-to-day basis.
Files and iCloud Drive exist in part to satisfy the traditionalists who must create and manage folder structures of their own design (obviously, anyone can benefit from that flexibility). Being "forced" into an app-specific default folder was totally unsatisfactory to them, and they complained bitterly (some still complain, but they have less to complain about). But different people have different requirements and habits. For many, a system that, by default, puts all documents created by a particular app into an app-specific folder is more than they would have done on their own, and therefore can actually be beneficial to organizing their data.
So, old practices and settings continue to be supported. No doubt, should Apple decide to dispense with those historic, app-specific toggles they'll have to create an app-specific folder in some other way. And undoubtedly there will be some who complain that the toggles have been removed. Such is life.
