[contravariant]

You could generate a webpage and link to it without needing to host it somewhere.

At any rate, if you allow a URI scheme that embeds the data in the URI itself it'd be very odd to arbitrarily restrict the valid MIME types. It'd be like forbidding a http URL from linking to a JPEG.

[Jarwain]

Well in a way you're just offloading the cost of hosting that code/data in that case. Instead of hosting it yourself, the page with the link is hosting that webpage.

Well it wouldn't really be arbitrary, it'd be specifically HTML and/or JS, for security related purposes.