Ron,
1/8 in. in 10 ft is a common tolerance only because it was in use for many years when no one measured floors, and is now in use because some specifiers don't understand floor flatness. And it definitely is not "achievable without much difficulty," especially for residential construction. In fact, ACI 117-06 doesn't even include that tolerance. The tightest straightedge tolerance in ACI 117-06 is 3/8 in. in 10 ft for 100% compliance. There is virtually no need for a residential floor that is flat to within 1/8 in. in 10 ft or with an FF number of 60, the superflat category. As stated in ACI 117-06, "Only skilled contractors, using sophisticated equipment, will be able to achieve this level of quality." That level of quality is specified for high-rack warehouses, TV studios, or other floors that must be superflat to perform well.