Well yes you are right. But it extends much further beyond this.
For a paper based applicant, imagine your entire package being lost for some weird reason. Embassy already claims no responsibility and this is possible.
For a student or other short term visas (whose processing times are not long), this is less likely - and less of hassle. But in case of professional immigration where people typically are 'in process' for years, this does happen often. I know at least one family WHO ARE STILL IN PROCESS for little over 3 years where embassy at one point lost their originals. The pricipal applicant, had to get duplicates of all of his original docs.
Imagine this for a second, specially if you are not a student. You have lots of originals in there, all of your degrees! obtained from many institutions God knows how many years ago. Job experience letters, police certificates, passports and the list goes on.
Online process is much better in this regard as well i.e. bare minimum originals required and therefore less risk.
But when you have no other choice, the least is to always keep a copy, better yet, scanned originals so you could get as many copies as need. Plus if you are like me, digital data is less likely to be lost than physical one. You always have some kinda duplicate in some sent email / back up hard disk for digital one.