So then you're sending every keystroke people make to a central server?
Even assuming that the connection is secure (never a good assumption), that still means that there is a single point of failure. And one with drastic consequences.
True, but anyone that can gain privileged access to the computer is already king of the castle. Why attack it offline when you can just keylog it? I think it goes back to being one part of an overall security posture. Encrypt your workstations and people can't just pick them up and own them.