I'm not a big fan of it, but in-course OB is needed where the basic concept of the hole would be severely compromised by not having it as well as endangering the players on other holes. Beaver Lakes CC is the only course around western PA that I can think of that has it. Without the in-course OB, the dogleg-left par 5 fifth hole would allow the player to hit their tee shot over the fourth tee and third green, shortening the hole by a substantial amount, removing the challenge of a water hazard that runs down the right side and putting players at risk on both the areas mentioned.
We have had a couple of events there and never considered removing it. Neither has the local PGA section.
The hole might not be great architecture, but it is what is there and the OB is needed.
Rob, your comment about the basic premise of the game, is true, but there is also the premise that you play the course as you find it. There is plenty of room to play the hole without hitting into the OB area, the players all know it is there and they deal with it.
If you have a course with a public road running through it, do you mark the road OB? If so, is a ball which comes to rest on the other side of the road, but back on the course, in-bounds or out-of-bounds?