They have, and then they pressed them into little pellets for all of us to enjoy!
Grinding up the hops just increases the contact surface area. You are correct, it does slightly increase the hops utilization, generally by about 1/4. Pelleted hops are merely ground up hops that have been pressed into pellets.
Beer so good, it's frightening.
2014: Seven Heavens Series One: Vilon, Mystic Melomel, Skeeter Pee.