I agree. I certainly woudn't want that. I mean, aren't there tools that let you work on the files directly on the server? That's basically doing the same thing, and that practice scares me. What if you make a mistake? I wouldn't want to upload an unfinished page, or not be able to recover the old information. There have been a couple instances lately where I've screwed up and needed to download the version on the server.
For someone who knows what he's doing, this may not be as much of a problem. However, my father's company has their website on their own servers, and until a while ago, their graphic design person was opening the files directly from the server and editing them there. The company website got screwed up a few times until I recommended she make a copy first and work on that.
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Matt