I understand your reasoning but you are the only person who has ever said to use this option to me. 99% of the people out there are not keeping sensitive info on their iphone just in case they lose it so I dont really believe this would ever be an issue. unless you work for apple and lose your new iphone in a bar.........
I would also say never use that option and unless youre handing it to Apple to get a replacement. This feature has been known to seriously cause problems for phones that were jailbroken. Anyway, if youre going to use the erase all feature, youd better make sure you can restore it afterwards. I wouldnt buy a phone that was just erased all and nothing else.