ESXi abstracts physical storage from virtual machines by providing host-level storage virtualization. This additional virtualization level gives more flexibility and makes it possible to have storage-related features that are hard to implement with traditional physical servers.
For example, vSphere 5 introduced storage-related features such as:
Storage vMotion: This allows migrating virtual machines between available storages without any downtime
Storage Thin Provisioning: This improves space utilization by allocating available storage capacity between VMs dynamically
Storage DRS: This provides load balancing between available storages based on I/O latency and storage capacity
VMFS5: This is a high-performance filesystem optimized for VMs, and many more