The heart of our format (which I'll call e0, after Richard Pipe) is index.html. The book opens to index.html, and the reading system shows us what's there (unless it's marked hidden, as HTML5 allows us to do).
So it's entirely possible to create an .e0 file that consists only of index.html in the zip. However, I think that requiring all content to be in index.html is too restrictive. Partly I'm just lazy; having split hundreds of single-file e-books into chunks in 2007–2008, I don't want to do the reverse. But some books are not all the same thing.
I think the clearest example is with metadata. If we put book metadata into meta on the index.html file, we can put chapter-specific metadata in meta in a chapter file. EPUB can't do that! With a short story collection, the editor can be cited in index.html, and each author in the component HTML file containing their work.
Styles may differ between sections, and books may even alternate between reflowable and fixed layouts. Portions of books may be mixed together; I'd rather drag the new file into a folder and make a single edit to my nav file (in index.html) than paste a bunch of new content into a giant file. And heaven forbid if you muck up the nesting of divs in a forty-thousand-line file!
So make One Big File if you like. But maybe someone else's books may benefit from having more than one.