That's not a terrible idea. But let me ask you this: What about <lowercase>? Or <smallcap>? Or "Title Case"? Or any of a myriad of other markup tags? How many buttons should there be?
Part of it is technical limitations in the number of attributes that can be applied to the text in underlying edit control, especially the intersection of the controls on Windows and Mac.
But mostly, this is a version of a question that we often ask ourselves about the user interface. Do we add every possible option to the UI, making it look like a 747 cockpit with dozens of switches and knobs? Or do we try to keep it simple for basic operations, and, if so, what functionality is considered basic vs. advanced? How can we satisfy everyone?
We've talked about making the controls configurable, or customizable, which is a big effort to get right, but it's under consideration. Maybe something like InDesign's idea of different "modes," such as Essentials and Typography.
Another idea in the works for the Text Editor is to make it easier to modify the formatting of variable text without writing rules, including case changes (upper, lower, title, small caps), as well as number, currency, date, and phone number formatting. We're looking to centralize these options into a pop-up or fly-out dialog so that they don't make the main dialog more complex. Hopefully something like this will be available in a version later this year.