Sure, you can loose that too, but it's a practical solution that actually works. Your solution "just keep your computer safe and make plenty of (safe) backups" is simply not practical for 90% of the people out there, because securing your computer has a tremendous learning curve. Securing a piece of paper on the other hand is something people do pretty well, see paper money.
Most people don't keep long-term savings in the form of paper money precisely because paper can be easily lost, stolen, or damaged. That said, I do think appropriate hardware is probably the best solution for most people. (Assuming trusting someone else with your key is out of the question.)