Agree on all counts. I'd never do a critical (crash capable) application open loop or where a pulse and direction signal is outside the loop closure. If the pulse wire falls off you have no way of knowing you aren't in the location or on the path you think you are. But....I bet there are many, many in-between applications that will be enabled or improved by taking this high-end motion feature and rolling it right into the PLC.
I wouldn't push people to use it places they weren't comfortable, but if we added the encoder input and following error, I think it would satisfy this need quite well. The PLC would know exactly what he's telling the servo drive, who is closing the loop on the PLC specified position, and the servo drive's encoder is reporting the actual position back to the PLC, who can kill the entire multi-axis action at the first sign of trouble. A break in the pulse train = following error. A break in the encoder feedback = following error. If anything, I think it would be more finicky and prone to faulting, not less.
Open loop though? Yeah, I agree on both points. For critical stuff, don't. And yeah, there's likely a ton of non-critical stuff that could benefit.
