When someone is mugged and has $100 cash stolen, you don't disparage the idea of holding cash.
If my bank account can be completely drained in a way that the money can’t ever be recovered, that’s not a feature, it’s a bug.
... and I hope you realize that your bank account CAN be completely drained without the money being recoverable. If you're trying to say it can't, then might I suggest to watch some scam-baiting videos to see how those scammers operate, and how they try to do exactly that to the elderly and the unaware. You can call it a bug all you want, but it's quite possible to have your bank account drained; and, despite what others in this thread have said, an attacker can do that from thousands of miles away.
Just like with any other currency, split between cold- and hot-wallets appropriately.
Yes, you do, if you are using “cash” in the same sense in both places (physical currency).
If you use cash to mean “fiat denominated depository accounts and investment instruments” in the second case, sure, you don't hear that, but that's equivocation as that's not something that gets stolen in a mugging.