One of the main motivations for FUIF is to have an image format that is responsive by design, which means it’s no longer necessary to produce many variants of the same image: low-quality placeholders, thumbnails, many downscaled versions for many display resolutions. A single file, truncated at different offsets, can do the same thing.
FUIF isn't anywhere near ready to use, but it's a fascinating idea. I love the idea that the format stores the image data in such a way that you request just first few kilobytes of the file and to essentially get a low-quality version, then you request more as needed. See this little demo from Eric Portis that shows it off somewhat via a Service Worker and a progressive JPG.
If this idea ever does get legs and support in browsers, Cloudinary is super well suited to take advantage of that, as they serve the best image format for the current browser — and that is massive for image performance.