This is a variation of the "human readable files" argument. So once again I claim that no such thing exists other than printed listings (which then are not machine readable, at least not much in practice).
The image file is our source: the preferred form for editing programs. It is far nicer when coupled with the .sources and .changes files, of course, but we can get by without these. You do need the proper application for dealing with the image - the VM.
Now we can dump out the image as a huge XML file and we should have no problems reading that back in. We can also develop a more refined system like the Transporter tool in Self. But would the result be human readable? Only in the sense that it could be printed and a person could read it over the phone to some other person. Nobody would understand it (unless it was a trivial "3+4" image) nor want to make any changes to it in this format. So I would argue that this would not be a "source file" by any reasonable definition even if it did play nice with cvs and vi. And having pointed text editors to my share of .sources and .changes files from various Smalltalk I would argue that these aren't quite sources for Squeak either (though they are from GNU Smalltalk and Little Smalltalk).
Our sources are the .image files. It isn't what people are used to, but that doesn't make it less true.
-- Jecel