Actually you can stop iTunes from doing that if you want, and organize the files and naming however you want. Though I can't imagine wanting to do this as I don't care how they are organized or named as long as they are on my device to hear later.
In iTunes you can go to Edit->Preferences, the Advanced tab and uncheck Keep iTunes Media Folder organized to stop the renaming of files. Most people also uncheck Copy files to iTunes Media Folder when adding to library too. Then Click OK.
Now you can rename the files how you wish, and move them around where you wish using Windows Explorer. After you rename or move a file, then you get to locate it in iTunes when you try and play it or access the Get Info window. Then you can show iTunes where you put it and what it is named now. This pain is just for the files that are already in your library.
New songs should be placed where you want them, and named how you want them BEFORE adding them to iTunes. This avoids the Locating step above. If the ID3 tags are not updated with the Album and Artist, etc. then you may also need to update that information in the iTunes Get Info (Song Info) window.
Anytime you move or rename a song, you will have to tell iTunes what the changes are before you can sync or play the song. But if you do it up front, then iTunes will be happy to let you have your own organization scheme.
There is a limit to song file name length though. 36 characters based on what I am seeing in my library. The ID3 v2.3 tags can of course handle a lot longer.