I worked in IT at a medium-sized college, and we got 3 or 4 laptops a week in with either HDD failure or unrecoverable corruption (usually due to viruses). In either case, recovery partitions were un-usable. Fortunately, we had a bunch of OEM install disks lying around, but most people aren't in that situation. So yeah, it's less common than reinstalling due to software issues, but hard drive crashes happen often enough that it's worth having an install disk.
But then, this is just one of the many reasons why I build my own computers and use exclusively OSS.