This is perilously close to an opinion-based question/answer but I'll try to provide some facts with my opinions.

1. If you have a very large number of files in a folder, any shell-based operation that tries to enumerate them (e.g. `mv * /somewhere/else`) may fail to expand the wildcard successfully, or the result may be too large to use.
1. `ls` will take longer to enumerate a very large number of files than a small number of files.
1. The filesystem will be able to handle millions of files in a single directory, but people will probably struggle.

One recommendation is to split the filename into two, three or four character chunks and use those as subdirectories. For example, `somefilename.txt` might be stored as `som/efi/somefilename.txt`. If you are using numeric names then split from right to left instead of left to right so that there is a more even distribution. For example `12345.txt` might be stored as `345/12/12345.txt`.

You can use the equivalent of `zip -j zipfile.zip path1/file1 path2/file2 ...` to avoid including the intermediate subdirectory paths in the ZIP file.

If you are serving up these files from a webserver (I'm not entirely sure whether that's relevant) it is trivial to hide this structure in favour of a virtual directory with rewrite rules in Apache2. I would assume the same is true for Nginx.