The original archive format was by SEA, and was (naturally) called ARC, and the files had the ARC extension. As the program developed, several more capable compression routines were developed than the original one, and added to the ARC definitions.
Several years ago, a man called Phil Katz developed a much better compression method, but he used the same format as SEA did for their archives, and essentially took their code for the format of the archive (which they freely distributed) and make his own program in competition to them, called, PKARK, but still supporting the ARC extensions along with his new ones.
After a lawsuit, he changed the name of the program to PKZIP, the extensions to ZIP, added newer and better compression routines and (to comply with the lawsuit) dropped support for the SEA ARC formats and extension. He has since improved the format even more, until now the format is essentially the standard for sending multiple files around the world as a package. The format stores the data files on it in a lossless compression that is a version of the Lempel-Ziv method of compressing data.
By sending files ZIPed, you are able to send many related files at once. Also, because they are compressed, it takes much less time to send them over the net or by modem.
Another reason for using ZIP files here is to ensure that somebody can't just "click" on one of the files and be "shocked" that they are now reading an obscene sex-story! If somebody reads these stories, it's because they downloaded them, converted them, and then used another program to read them. Nobody made them look at them by accident!
If your system does not presently handle ZIP files, then you should get a utility to do so; as they're useful for far more things than just stories.