Issues with local file-based storage of configuration:
In containerized hosting environments, the local file system, outside of the private and public files directories, is typically read only.
Configuration changes cannot be exported in the hosting environment.
Storing configuration in the public file system goes against best practices, as some configuration files may contain sensitive information (like credentials for remote services). This creates a security vulnerability and is an avenue for exposing sensitive inforamation
Large sites with alot of content can have databases that are quite large. In a hosting environment where the file system is "read only", the only option available for exporting configuration changes (outside of the Configuration Management UI, which is janky on large sites with 1,000s of configuration files) is to export the database to a local environment, spin up the Drupal site and export configuration.
Proposed resolution
Provide support for using a remote object store (like Amazon S3 compatible storage) for exporting configuration files.