Wow, that's not true. Some people had issues with staking in hybrid, for now it works perfect if you keep it in classic until they bring out a fix. Security is fine. Keeping coins on an exchange is just incredibly stupid. Chance of losing coins on an exchange is at least 100 times bigger than on your own computer.
Staking in hybrid mode does not work and will not work (due to not having the complete blockchain downloaded & up to date.)
Classic way is the only way it will stake, but the default activation upon install is Hybrid mode.
At Least some exchanges make backups, 99% of users don't.
EDIT : Things that can destroy your PND coins if you don't keep a backup
Fire, Flood, Stolen PC, Hard drive failure, and the newest cryptowall viruses that lock up your data unless you pay a ransom.
http://www.mlive.com/business-resource-center/2014/11/new_cryptowall_virus_threatens.html