Earlier quoted context omitted.
I don’t think this was particularly modeled on MS Word. The incremental update feature was introduced with PDF 1.2 in 1996. It allows to quickly save changes without having to rewrite the whole file, for example when annotating a PDF. Incremental updates are also essential for PDF signatures, since when you add a subsequent signature to a PDF, you couldn’t rewrite the file without breaking previous signatures. Hence…
I'm pretty sure you can change various file formats without rewriting the entire file and without using "incremental updates".
PDF is designed to not require holding the complete file in memory. (PDF viewers can display PDFs larger than available memory, as long as the currently displayed page and associated metadata fits in memory. Similar for editing.)