It doesn't need to be on a separate disk, just a separate partition. The reasoning is that this makes it really easy to change your distro without affecting your data: all your data is (or should be) in /home, with the possible exception of any databases or webservers you're running (which would mean you're running your PC more like a server, so this won't apply to typical desktop users). You can wipe out everything in your root partition but your data is safe and secure. Putting it on a totally separate disk makes it even more foolproof since you can just cut power to that disk and then there's no way for it to be affected by the system upgrade, but that's overkill IMO.
