Forum OpenACS Development: Re: Virtual urls in CR / File Storage
folders are just content items ... the consistent theme in the CR is that a template attached to a content item is used to render the item - not the item's children. So the template hierarchy you describe makes folders a content item that are a special case that doesn't work the way other content items work. One possibility would be to add a new column to the folder content type named "the default template to use to render my children". Or to build add that concept to the template-item map or something. That would add the functionality your client wanted (which I agree is useful) without breaking the template functionality for folders themselves. I think being able to change the look of folder display throughout the system by replacing a template attached to "content_folder" is functionality worth retaining.
(not that file storage or any other packages *uses* that functionality!)