I don’t see anything wrong with using Dropbox, iCloud, or other cloud service to store important documents and photos. But there is a problem if you have these files only in one place. At a minimum, what would you do if you accidentally deleted them?
I had some important notes in Notes, so synchronized on my Macs, iPhone, and in the iCloud. Somehow I accidentally deleted them. Because of that automatic synchronization they simultaneously vanished on all devices. Yes, Notes is supposed to save deleted notes for a month, but for some reason that didn’t happen. I only got the notes back because I had a recent full disk (clone) backup I could restore from.
I used to always test my employer’s backup system by “accidentally” deleting a file and requesting the IT department restore it. (No, they couldn’t always do it!) It makes sense to try the same thing on some of your own files to see if you really have a backup that can be restored.