Why is the disappearance of Mt Gox a problem? I'm sorry if this is a stupid question, I'm not a bitcoin user and may lack important information. My understanding was that each bitcoin user has a wallet on his harddrive or wherever, where he stores his bitcoins with the transaction history proving that they are his.  So the system is pretty decentralized. Then why is it such a problem that Mt. Gox disappears? Don't the people losing money have it in their own wallets, if so why?

Edit to add: In case the question was unclear, I was asking for why people lost money with Mt. Gox - not about the wider ramifications like potentially lost trust in *coin etc.
To actually try and answer your question, Mt Gox acted as a trusted middleman in btc trading, and thus had to have control over their users money. 

Let's say dude A has a few btc he wants to sell, and dude B has a few dollars he wants to buy btc for. B doesn't want to pay until A sends him the btc, and A doesn't want to send his btc to B until B pays. Unless they trust each other, they can not do business.

By putting money and btc in the hands of a supposedly trustworthy middleman (Mt Gox), A and B can do business. As soon as they agree on the price, the middleman, who has access to both the btc wallet of dude A and the dollar wallet of B, can make sure that both transfers are made, so that each person gets what they agreed on.

So essentially, users had dollar accounts and a btc accounts at Mt Gox, and it is from these that things seem to have gone missing.



As has been pointed out below, it may be that accounts still show the right balance, but Mt Gox doesn't have that money anymore.