Brianna, apparently your contact mentioned DNG, but the excerpt you quoted only mentions "higher resolution files". 300dpi JPEG files are not "just good enough". They're high resolution files. Now, if we want to follow the standard of the printing industry, the priority would be to allow TIFF files.
Afaict it is rare for a photographic TIFF to contain more information than can be stored exactly in a PNG. PNG is a much saner format than TIFF for a project like commons.
What we do need though is the ability to choose thumbnail parameters other than size. e.g. have a png in storage but generate JPEG thumbnails from it.