My partner has to manage having a 500MB quota on their home directory at work. A couple of times a month something decides to dump 300+ MB of data in there and break everything.

A 300MB file isn't a preferences file, though.

Apps use dotfiles or dotdirs for caching data. Think browser caches. That's the point of the standard... All the non essential caching data lives in one place and so is easy to prune when needed.