Lion should really be on a disc, and this is why i think so:
Lets say something goes horribly wrong and i have to reinstall my OS. It happens to the best of us. Instead of popping in my Lion disc and installing like normal i'll have to...
1) Install Snow Leopard
2) update to the newest 1.6.X if my disc version is before the App Store was introduced.
3) Download Lion (~an hour depending on one's connection)
4) Install Lion
5) Update Lion
This could take a large part of your afternoon.
You are forgetting about the recovery partition. Reboot into the partition, click "reinstall lion," (wait as it downloads, this part would suck--maybe it will be able to see the installer if you have it on a usb stick) done.
In the event of a total hard drive failure, as I've said before, I think Apple wants you to take it to them to fix. I don't like this at all.
You should really consider backing up all your stuff. Hard drives are dirt cheap and it makes it so much easier to restore in the case of hard drive failure.