See if this helps. If cloud heights were reported in MSL, and not AGL, then at an airport which sits 1500' MSL, a 1500'OVC layer would be fog and wouldn't make any sense or even wackier would be a 1000'OVC layer at that same airport, what is there a layer of clouds if you dig down 500'? There'd be no need for FG, or HZ, or even VV, really, because you could just call it a broken or overcast layer at the airport's elevation and that wouldn't really tell you anything.