Interesting. I had known about the mosquito noise problem (as cjensen notes (and I was joking about gziping 10-bit 422)), but I didn't realize the progressive decoding was a part of the standard. I spent some time in the guts of the DCP in a previous life, and software decoding of JP2K was always a nightmare. So I'm a bit jaundiced.
But, as always, when you think an engineering decision is insane, you're probably missing the context in which the decision was made.
The advantage of the wavelet format is that they can implement progressive resolution decoding, so a decoder only needs to read half of the data from a 4K source to decode a full quality 2K image.