It means you ignored the instructions at the top of the form about clicking on update regularly to save your work. We put this in bold face and people still ignore it. You should click on update as regularly as you'd save a file when editing it: every few minutes.
Of course there is more at stake for them which should make them more careful. But whether someone reads the text in the UI is not in general a measure of cluefulness. In fact smart people may be even less willing to read anything because they assume they don't need to.
I'm pretty sure if you don't read and follow instructions for applying to something, it means you should be disqualified. Not other way around of having Paul Graham pander to everyone.
Most environments for writing text have an autosave. There's a PeriodicalExecuter, in Prototype, where you can run a javascript command every n seconds, so you could do a form.submit every 5 minutes or so, to avoid the timeout issue, if this starts becoming major.
You're not even thinking about it correctly. The question wasn't whether or not it was hard, it was whether or not people -- good people -- actually did it.
I would hope that at least some people were thinking harder about world domination than about whether or not they needed to scroll down and update. Since I've been personally burned by forgetful webpages before, I wrote everything in a text-file. In the process of copying, pasting, proof-reading and reformatting, I just barely tipped over the timelimit, however long it was. Argh. (Luckily, the back button wasn't so forgetful as in, say, facebook.)
An investment firm that would turn down an otherwise great opportunity to make money due to some small mistake like that is making a mistake.
I see what your say saying, but essential you knew the information you were entering was very important to you, that you wanted it saved. You chose to do it offline. The functionality was built in from the start, so I chose to use it.
Regardless, Cheers and good luck with your application.
Did you ever read Joel Spolsky's guide for User Interface Design? Users don't read anything. You need to design your UI with that in mind.
http://www.joelonsoftware.com/uibook/chapters/fog0000000062....