I would say that Time Machine is mostly NOT about recovering from disk failure. If it were, it would only keep the most recent versions of your files, and toss any old ones as it backed up newer ones. The fact that so much engineering effort (not to mention the straight-from-the-holodeck UI) was invested in preserving multiple versions of your data makes it clear that Time Machine is mostly about recovering from human failure. Having your data on two partitions on the same drive allows for that to happen.

I agree it'd be nice if it let you choose a folder to back up to rather than a drive, but it's just not in the cards at this point. No big deal - Apple went for maximum easy. Maybe we'll see a more configurable Time Machine some day in the future.

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Is there not some clever way to make time machine backup to a sparseimage on the internal volume?

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