May I add some comments to the discussion:
Standards are normally a good and a bad thing simultaneusly. On one side they allow to compare things better, or to create interoperability between multiple manufacturers - benefiting the customer. But sticking to a standard for too long a time, impacts the innovation opportunity in a technical field.
The ISO standard 12232-2006 defines the requirements for the "ISO setting" and originated in the days, film was the recording medium for light, describing typicall the sensitivity to the film material. With digital cameras the two boundary conditions are the ability to capture light (limited by the FWC) and the amount of noise created by the readout electronics. A second ISO standard relevant for this consideration is the one for defining the dynamic range of a digital camera ISO 15739-2003.
So the "native" ISO settings comply with the somewhat arbitrary numbers chosen by the standard comittee members ot have a reference. To quote John Kerr:
The concept behind the dynamic range definition given by ISO 15739 is based on the ratio of the maximum luminance that receives a unique coded representation (the “saturation” luminance) to the lowest luminance for which the signal to noise ratio (SNR) is at least 1.0. This is based on the very arbitrary assumption that detail recorded with a SNR of 1.0 or above is useful and that recorded with an SNR less than 1.0 is not.As the type of processing and visual implications aren't directly correlated, manufacturers started to extend the ISO settings their cameras are capable of. As they typically could not match the SNR for the noise floor in these higher settings, the sensitivity part became a proxy for these settings. Hence the Hi and Lo settings where introduced.
The 2006 modification of ISO 12232 introduced other liberties for camera manufacturers to give them more latitude what they would consider the right luminance level for i.e. ISO 100 (REI = Recommended Exposure Index, introduced in the D2X timeframe)
rgds,
Andy
Further reading:
Douglas A. Kerr:
The ISO Definition of the dynamic range of a digital still cameraDouglas A. Kerr:
New Measures of the Sensitivity of a Digital Camera