What if the loss was one or two orders of magnitude of the current loss? I am sure the SAFU fund has a limit beyond which Binance would not be able to cover the losses.

What is important is Binance and the other popular exchanges should seriously look into cryptoinsurance, as Coinbase has done.

Crypto insurances are underwritten by Lloyd's of London and other large insurance companies. These insurance providers would check to ensure that the security provided by the exchange (or custodian) is first class BEFORE providing cryptoinsurance.

It is very possible that Binance attempted to secure such insurance but failed to meet the insurers' requirements on security.