I think you have a greater chance of drive or online storage failure than a fire or robbery.To be honest, in the past decade, I've heard more complaints of data loss and/or corruption than house fires or robberies, so the odds that CD set being a poor investment drop to a considerable degree.
But there'd be no data loss if those people had remembered to make backup copies, which is what you're always supposed to do with all your data. It's not the fault of the medium if the users failed to take common-sense precautions.
It's not a zero-sum choice between one or the other. There are virtues to both and drawbacks to both. Which is why it's good to have
both, because the virtues of one can make up for the drawbacks of the other.