It's or Its? (It's this simple, now give the dog its food..)

When do we have to use "it's" and "its"? The answer is simple:

It's = it is: ( 3rd person neutral pronoun +verb to be )
It's easy to speak English. = It is easy to speak English. ( É fácil falar inglês)

"Its" is the possessive form of "it": ( possessivo)
It hasn't lost its charm. ( ele não perdeu o charme dele...)
London hasn't lost its charm. (Londres não perdeu o charme dela...)

So, are there absolutely no exceptions to this rule? How come the creators of this intensely confusing language decided to drop the apostrophe for the possessive form?

Actually, that's not the only possessive form without an apostrophe: his, her, my, our also belong in this series of possessive determiners, so it would stick out as peculiar if its had an apostrophe when all the others do not: 

his, her, my, our, your, their, its

This leads to an odd question: Who owns the food, we, you, they or the dog?

It's our food.
It's your food.
It's their food.

Well then, is it possible that you could write: "It's its food"? Yes, you could, if you were talking about a strange dog of unknown sex.  (We usually call our own or friends' pets 'he' and 'she'.)