Hi Robin,
Herbivores and humans can often make decent use of ground dried herbs. Small carnivores (dogs, cats) often cannot, due to their short digestive tracts. In the case of slippery elm, where the active ingredients are not absorbed but act at the mucosa, there's no issue. But where you're looking for absorption and pharmacological effects internally, they're not as effective for small animal medical needs.
In China, ground dried herbs aren't used because it is believed the act of cooking activates the ingredients and creates the Qi of the formula. Granular extracts and decoctions are the forms consumed in China. Certainly granular extracts result in a powder that has five times the potency of bulk dried herbs. Our granules are closer to ten times more powerful, due to their high density.
I hope that answers your question. It's a good one to ask,
Steve