I don't know why it was removed, but I suspect it was either to conform with the internal form of the data, or to the least-common-denominator presentation device, or both.
Yes, the document is stored internally as a linear stream, but from the user's point of view the presentation should be as a reader sees it.
Side-by-side edititng is a great example. One of the key principals in good user experience design is providing value - simple, clean functionality that users find useful. Makes me question the new design team's competence. Deleting this feature from Pages was a stupid decision. I am a loyal Apple user because Apple form always follows function.
