Well, no big benefits like compression from ext2, but it's still a little better for handling wierd file names and such than ISO9660+RockRidge... I'm not sure if char & block special files exist in RockRidge? But that's not likely an issue.

But it does permit writing settings, etc. back directly.

For creating a filesystem, I don't know of a mkproto.ext2, but you can just du, add maybe 5% to grow (or a definite size, for games, to allow for dropping retail data files in...), mke2fs, and cp -a; that should do it.