Compressing your files as tar.gz or zip for storage or backup saves space and is faster than handling thousands of files. But it looks like small corruptions in the archive, for example because of damaged media, may make irretrievable many more files than the one damaged by a single bad block.
Is that true and should it be of any concern?
it is true that having 1 file for several files may mean (depending on the algorithm) that having that file corrupted could induce that all (or several) of the embedded files are corrupted.
however the concern should be on avoiding corruption :
have several backups of the archive, stored on several locations, to avoid losing them all at the same time (theft/angry employee/earthquake).
and to detect if corruption occurs at the time of making the archive, it should be tested : always test backups in some way : for example, once you have archived things on several medias (or locations), use a method to test the archived media againt the originals. Preferably using another machine, to avoid having a "reversible" problem making the archive look like the original even if corrupted.
