Should we also home-school our children, keep our money under our mattress, grow our own food, give ourselves medical exams? There are companies/service providers out there who we outsource those things to because we don't have the time or the expertise. Seriously people have been using web-based email for over a decade. I've yet to hear of any doomsday failures but I do know I've had a couple hard drive failures during that time span.
The majority of users out there do not have the computer savvy that Richard Stallman has. What about my mother who's hard drive is always on the brink of failure and doesn't care to know what's involved in properly backing up her photos or documents? I encourage her to use services like flickr and Gdocs for this reason. The benefits far outweigh the drawbacks like privacy or portability. Anything that is so sensitive or important is on paper and in a fireproof safe like it should be. Don't get me started on Privacy.. what are you people doing that's so sensitive??
Until every computer user has sys-admin capabilities, making use of the "cloud" makes perfect sense in my opinion. That being said, I think its important to pick services you trust and who make it easy to export your data at will.