Agree with you with the exception that for some people, they like trading other altcoins so they keep a portion on hand to trade those.
However, if a person thinks that safety is guaranteed at an exchange, they're crazy. We can easily lose, so I warn people to avoid keeping all eggs in one basket.
It's nothing wrong with trading, and keeping a small tradeable % in an exchange.
But when I see people using exchanges as banks, some guy wired 1 million $ to an exchange, and left it there after seeing how much "safety" the exchange guaranteed, I mean: 2FA auth, HTTPS, e-mail confirm on withdrawal... Wow that must be ultra safe, what could go wrong?
Just ask all the exchanges that used the same security protocol and still got hacked.