Ha ha! I wasn't actually expecting an answer!
This seems like a very contentious issue.
From a purely organizational perspective the system seems confusing to me; possibly due to the naming convention, possibly due to the seemingly arbitrary complete separation of albums and categories, or possibly due to my own needs... I haven't quite decided which yet.
Putting the Albums into categories just seems more logical in that it would give more structure to the system. At the very least the ability to put images (media) into both albums and categories would be a useful step in the right direction.
For instance, I would like to provide my members with the ability to create personal albums of their artwork that they can share in any way they so choose AND allow them to submit images for a monthly contest (these images would be viewable to everyone without preference by the owner of that image and from them only a handful each month would be selected to be featured).
Currently they would have to add the images they want to submit to the contest a second time under the "Contest" category (or whatever I decided to call it), which means that it shows up twice in the media index. This is redundant and, in my opinion, bloats the system.
Of course, I could be looking at this the wrong way, misunderstanding how the system works or any number of other things as there is little documentation that I can find on the Gallery system.
Experience has told us that some galleries came from a platform that was albums only, some came from a platform that was categories only, and some came from a mix. All of those bases are covered with XenForo Media Gallery.
However, there's quite a few people who do indeed also want to see albums within categories as you can see from this Suggestion:
Perhaps the answer is more options when setting up the Gallery. Such as the ability to hide certain elements from the media index page, give the category section it's own page, etc. I'm a huge fan of options. Also a huge fan of extensive, easy to find documentation.