Interesting discussion! I added a few comments in the document in defence of hierarchies
Basically, I think they are very useful for interpreting / understanding the data. In the Bangladesh work we've used them quite a lot. On the publisher side, I think they also allow data to be accurately expressed while also making it possible to publish more detailed data by publishing subcomponents of larger programs.
At the same time, we definitely need better advice on ways of handling hierarchies from the user perspective. It would also be good if some of the major tools that exist for exploring the data (particularly d-portal) handled this better.