Sub-Domain - VS - Main Domain

Technically web sites don't care where they are setup. They are designed to function independently regardless of where they are installed.

You could just a easily point a new domain to that sub folder and setup dolphin to use that instead. So your idea of how a different domain is handled just got shot to hell because different domains can also be in the same directory tree.

What holds back sharing the data is mostly the database. Each install of dolphin or any script for that matter, has it's own database. They don't share one, and that is most of the lack of sharing between sites. It has little to do with the location the files are in. Other than photos, thats not where the bulk of data is in. As far as dolphin is concerned or any web script for that matter, the files such as photos are just a toys dropped in a toybox. Could be seperate toy boxes or all thrown into one. Its the database that determines how the script finds it and where it is located.