TheedarkcornerFeatured By OwnerJan 24, 2013Hobbyist General Artist
I think it originally started with Lauren saying that ponies do their business on the ground, like real life ponies, but that the reason you don't see anything lying around is because it floats away, due to being made of helium.
Oh? That kinda makes sense. Even if it means that pony feces is lifted into the atmosphere and apparently into space (unless it drops back down elsewhere where nopony usually goes (Everfree Forest?)), which would slowly decrease the mass of Equestria over the millennia due the components of the feces not being reintegrated into the cycle of life.
But that's over-complicating things. Probably best not to be too literal with these things. XD Unless someone in the fandom makes a joke about it, though one concerning pony dung probably isn't high on the list for exploitable jokes.