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I believe because the indexing is not decentralized. If you ever lose "the application database", you need to replay blocks since the application genesis to recover the index.

That in itself wouldn't be that bad. At least you have a recovery process. It should also be possible to checkpoint the database to a backup periodically and then you only have to replay since the checkpoint.

I don't see a problem here. Why would I lose application database?

Yeah, I don't see the problem either. You got to be very sloppy to lose the entire database especially without backup checkpoints.

Yes. @smooth has right. This is what I had on mine mind. You can always restore the backup.

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