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Having an in-universe explanation is more interesting, but it might not be the case this time.
Daring Do could be an actual text-based book. It definitely makes Rainbow’s initial thought of reading as uncool make a bit more sense if some of her heroes don’t read.
This is just me, but I prefer explaining things in-universe rather than using a “because it’s fictional” approach. It’s more interesting that way.
I suppose. However, I doubt the Daring Do books can convey a story with simple pictures. Also, there have been times when actual words were used. They are rare, but it does happen.
Perhaps the reason is not because ponies are illiterate, but because the artists are just doing it to be quick and cheap. And, of course, to prevent current background ponies from having canon names just in case Hasbro wanted to rename them.
I’ve always assumed that a lot of ponies are illiterate. Twilight’s generation and the younger ones seem to learn in school. But even in real life, illiteracy in English-speaking countries was pretty high before computers and technology got so widespread. Before, you didn’t need to read and write if you had a simple physical job like a lot of ponies.
It would just be easier and more inclusive to use pictures rather than words whenever possible in a society with a large minority (or even a majority) of illiterate ponies.