Comment by kjhughes

You're right about hierarchy in the world, but there's a deeper truth that you're missing that relates to hierarchical structures being more amenable to description:

  The fact then that many complex systems have a nearly decomposable,
  hierarchic structure is a major facilitating factor enabling us to
  understand, describe, and even "see" such systems and their parts.
  Or perhaps the proposition should be put the other way around.  If
  there are important systems in the world that are complex without
  being hierarchic, they may to a considerable extent escape our
  observation and understanding.  Analysis of their behavior would
  involve such detailed knowledge and calculation of the interactions
  of their elementary parts that it would beyond our capacities of
  memory or computation.

  - Herbert A. Simon, "The Sciences of the Artificial", 2nd edition, page 218

Also, hierarchy in the physical world is not just due to one object being able to only be in one location at a time (or only one object being in a one location). It also arises due to the improved evolvability of hierarchic systems. Again, see Herb Simon's "The Sciences of the Artificial" for a delightful treatment of hierarchic systems and our cognitive relationship with them.