What are the drawbacks of using a web based wallet and how to overcome that? Can anyone tell me why many prefer to use application when compared to web based wallets.

What are the drawbacks of using a web based wallet and how to overcome that?
The chance of a "known" website to have various attacks and compromising schemes done to it are attempted all the time.  So if you wallet on online and that site is compromised, your coins are gone... However if the wallet was on your computer, then the chance that some hacker is attempting to hack into your network is so small.  Using your own computer, you just want to regularly create backups or your wallet.dat file from your wallet and encrypt it with a strong password and put it somewhere like a thumb drive that you put in a fireproof safe, or maybe online in google drive, skydrive, dropbox.  The chance that an encrypted file is discovered by someone is so unlikely relative in comparison to the many hackers knowing about the mass storage of a given online wallet.

You could always diversify.... depending on your strategy for assets and asset management, you could always do like 10-25% of your coins in online wallet, I personally would not do any more value than that.