See why a fairly popular freehost went down here as to why.
File system corruption. Configuration errors happen far more than most hardware failures, and are the primary cause for downtime.
I.e. if your controller card decides to flip out one day, your array is pretty screwed. Also keep in mind your disks are not portable between one brand controller to another, they use different means of striping and such.
For personal use though, I think it's fine for most things. Save that keycode for your $1M in the swiss bank account. It's just I see a lot of hosts thing that because they have RAID set up, that they are covered for backups. No so. :P
-Phil