Seems reasonable. If they run out of money, where does your blog go?
With that said, Tumblr has a very bright future ahead of them.
Answer to rhetorical question: because we can't be bothered, so we'd rather just pick a provider who is more likely to stick around than not.
LiveJournal & Six Apart have longstanding revenue models but aren't hosting users like the President of the United States or large corporate media entities.