In Foliotek, our electronic portfolio tool we have some users who do a lot of file editing. Basically, they download, edit, and reupload files while evaluating student work. The logistics of this can turn into a problem if there are many files to edit, and can be made worse if the files are very large and they share similar file names.
It would be a much more efficient workflow if they could edit the files and add comments directly in the browser. In addition to that, in-browser document editing would make the basic file editing easier for students and faculty who are using the system to store and manage their files.
Also, I did a write up about one of the technical challenges that was encountered when adding this feature: generating a multipart form post in C#.