One of the biggest problems with images or "copies" of very important personal papers like deeds, certificates of ownership, birth certificates, marriage certificates, stocks & bonds and wills is copies (unless properly notarized) of such documents are not legal for anything. This means a digital copy on a hard disk is, at best, only informational - since I know of no way to notarize a digital copy.
I think keeping copies is important. But to me, a better solution is to get notarized copies and give them for safe keeping to trusted family members, your lawyer, the designated executor of your will or even a trusted friend or neighbor - for the same reason you mention above - the odds of your home and theirs going up in smoke at the same time are slim.
Don't forget at least the last 3 years of your tax records too.
The bigger problem that I am seeing is more and more
bank offices are doing away with their safe deposit boxes. 
I have two banks. One is Wells Fargo and it has safe deposit boxes I keep important papers in. I even have a backup copy of this, my main computer in there. But my other bank is a regional bank. It recently moved into a brand new building and they did away with their safe deposit boxes.
Also, if you do have a bank safe deposit box, make sure you keep your bank updated on your address in case they do away with boxes - or risk your box getting drilled open and the content sent whoknowswhere?
