I've seen several responses from actives saying once a keystore is lost, all is lost.
The engineers behind this left mistake for a reason, knowing full well
a Windows crash or drive failure, or that the average, non-expert with
Ethereum, would eventually make this mistake and lost all their Ether
in the process.
In my opinion, Ethereum, and cryptocurrencies in general, are still not for the non-expert. Without wanting to sound condescending, they're based on difficult stuff, and require the user to be rather more than computer literate.
The terms and conditions for the original Ethereum Crowdsale stated the following (in caps):
"WARNING: DO NOT PURCHASE ETH IF YOU ARE NOT AN EXPERT IN DEALING WITH CRYPTOGRAPHIC TOKENS AND BLOCKCHAIN-BASED SOFTWARE SYSTEMS"
At some point the infrastructure will presumably become more user-friendly, but I don't think we're there yet.
Back to the back-ups...
Backing-up to another on-disk location is not the best way to store currency.
See: What is the recommended way to safely store Ether?
By creating automatic back-ups you increase the attack surface. By copying the keystore files to a second location on your computer, you create another place they can be found. If it's on the same drive, then you've done nothing to negate drive crashes.
What happens if you forget automatic back-ups are turned on? Or you switch them off that one time for some reason and then forget to turn them back on again? What happens if the back-up location no longer exists? What happens when you change the back-up location, perhaps multiple times, and you end up with keystore files scattered all over the shop? etc., etc.
Backing up automatically would make users dumb. It would mean they no longer had to think critically about how they were storing their currency. It would lull them into a false sense of security.
It's out there somewhere, locked up...
Even if you lose the keys to your account, you can still check the ether exists using the account's address and any bog-standard chain explorer. You'll be able to see it - and see that no one else has moved/taken it - you just won't be able access it.
...but my guess is, someone on the inside of ethereum.org knows how to retrieve it.
All the code is open-source. If there was a backdoor then people - people with lots of money invested - would have probably found it by now.
And secondly, where the lost Ether is.
As above - it's exactly where those people left it.