[petertodd]

If I suffered a catastrophic data loss large that caused me to lose my BTC, I'd still be more concerned about the rest of my valuable data that I presumably lost too.

Bitcoin is far from the only case where catastrophic data losses or leaks are very costly. It's something that's certainely worth thinking about carefully, but it's not a fatal flaw for the system's usability - if it were all digital data use cases would be fatally flawed.