Why is it not possible to assign a material only to the faces you have selected from within the UV editor? Not only that, but it looks like it is not possible to do this if you are selecting faces using an edit poly, or select poly modifier. This has to be the most intuitive, logical way of assigning materials, I have been using it for years in Maya, and I was baffled when I tried it in Max and it didn’t work. Am I missing something?

You can.

1.  Apply a material to the entire object.
2.  Go into Poly or Face subobject mode and select the faces you want to assign a second material to.
3.  Drag a different material from the material editor and drop it on the selected faces.

edit:
Actually you don’t have to drag and drop it.  With the faces selected, press the “assign material to selection” button.  Either one of these methods will automatically assign a unique material id to the faces and create a Multi-Subobject material for you.

edit2: Oops, I read UV editor and was somehow thinking you were asking about the material editor.