[ejwells]

In answer to the question in the header of the thread: no.
I mean, I guess if you're prone to fears and worries, buy a $6 dongle buddy, that way you're not actually inserting or removing the iLok itself.
I've had the same old school blue iLok for 9 years, removed and inserted it thousands of times, and never had an issue.
They're pretty sturdy, actually.
The generation 2 iLoks appear to be sturdier still.
As to iLoks "crashing," it's rare. Very rare.
Zero Downtime insurance is pretty darned affordable, especially if you have thousands of dollars worth of licenses on your iLok.
Mine is also insured against theft and loss with my studio insurance.
That said, I can no more imagine "losing" an iLok, than I could imagine "losing" any other piece of gear.
Theft is another thing, but there really aren't that many iLok thieves running around.
I think if my studio was robbed, they'd probably not bother with the little blue plastic thing in the USB hub.