why doesn't system_menu() return the option I am expecting
It's hard to know what you mean, but at a guess you're expecting system_menu() to be responsible for all of the paths you can visit in the system, and therefore you're expecting to see a listing of all paths in that function?

If so, that's not quite how it works. Drupal is extended by way of a hook system, one of those being hook_menu(), which allows modules to define menu items and page callbacks.

So in the case of jQuery Update, this is its implementation of hook_menu():

function jquery_update_menu() {
  $items['admin/config/development/jquery_update'] = array(
    'title' =&gt; 'jQuery update', 
    'description' =&gt; 'Configure settings related to the jQuery upgrade, the library path and compression.', 
    'page callback' =&gt; 'drupal_get_form', 
    'page arguments' =&gt; array('jquery_update_settings_form'), 
    'access arguments' =&gt; array('administer site configuration'),
  );

  return $items;
}


And that's where the jQuery Update admin menu item and link come from.