I mostly agree with you. But I wonder what setup you are using. But first, the reason I don't entirely disagree with you is that a backup is only necessary if your main computer hard drive fails. So while it's nice to have a snapshot of your hard drive going all the way back to 2008 (for example) it's not necessary to have all that data, really.
But yeah, it ***** when it fails. I assume you are either using a Time Capsule or a hard drive attached to your Airport Base Station Extreme - please let me know if this is not the case. I used to use hard drive => Airport, something that was never supported, and I routinely ran into the problems you described. The issue is that the airport base station cannot reliably keep the USB attached hard drive properly connected. The hard drive just disappears from time to time and sometimes in such a way that the whole thing gets corrupted. *****. I've heard Time Capsule has a similar but less common issue. If that's the case they should not even sell that product. It at least needs to be robust in the face of a power failure. It needs to be possible to check the disks properly and repair the damage of a sudden power failure.
However, I have been happily running (except for the switchover to Lion) with a USB powered hard drive attached to a Mac mini. The fact that it is attached to a real computer running Mac OS X means it's (1) supported and really should work and (2) has a more reliable connection with a real OS that is capable of checking the disks and repairing them. It works well. My main concern was leaving a Mac Mini on 24/7 but I solved that problem by just running it during the day. I don't care if backups aren't possible during the night. I sleep all my computers at night anyway.
So - long-winded reply. I am curious about your setup. No backup solution is 100% reliable. Time Machine is great because it's basically effortless if you buy a drive and plug it in. It's harder if you use a network drive, but the convenience of that is awesome (don't have to unplug your hard drive to take your laptop elsewhere, and you don't have to wait for the hard drive to spin up whenever you popup a file dialog!).
And finally, none of this is reliable because your house might be burned down or you might live in Louisiana, which is what happened to my sister in 2005. So I backup everything of importance to an server in the sky as well. The only thing that could screw me is if my house burns down AND my server gets blown up at the same time.
Cheers!