There have been several good responses here that explain why. The system you provided as an example may have been code compliant at the time it was installed, and clearly has functioned just fine. If you were to bring it up to current code, it would be safer. That's the simple answer. How much safer? I don't know, but it would definitely be safer. The best way to explain that to most lay people is with an analogy. Try this one.
That old 70's pickup you've been driving around since high school has been working just fine, and probably will keep doing so as long as you keep up the maintenance. There's a chance that you might die in a wreck, but probably not. A new truck has a lot of safety features built into it that would make it safer. If you can afford to buy a new truck I strongly recommend it, you're less likely to die in a wreck in that new truck. How much less likely to die? That depends.