Digitizing your life can actually help you protect the things in your life you think is important. I've often found myself to be a bit ahead of the curve when it comes to "going digital". Doesn't really matter in what way you mean this. For music I went digital around 1995, photography 1998, movies around 2000, TV around 2003 and finally books around 2007. I also started archiving all the emails I sent in 1998 and finally all the emails I receive in 2009. There are several advantages to having the things in your life that are important in digital form compared to keeping a book shelf with CD:s, DVD:s, photo albums.
First of all I always have access to everything important wherever I am. I can look at all the photos I've ever taken whenever I want to. Listen to all my music, have access to tons of books I've purchased, look up any correspondence I've had. All I need is my phone and some cell phone coverage. Especially for books this is extremely nice since bringing a couple of books when you travel can fill up your carry on pretty fast.
Assuming you take proper precautions there is no single point of failure that can rob you of your memories. If you have physical items it is hard and expensive to ensure you have two copies of everything and it takes a lot of space to store it. In digital form having backups is virtually free these days. Currently few things less than the entire fall of civilization as we know it would cause me to lose any of my stuff while anything physical I have is in constant danger of even just a simple robbery, earthquake, forest fire or flooding. I use Crashplan to make a full backup of everything I have in digital form that is important. It is very affordable and has a lot of really neat features. I also recommend using some sort of RAID if possible on any kind of server you use (I use RAID6 with dual redundancy). You should probably if possible try to avoid using single external drives to store important stuff since the way these drives are usually moved around seem to cause them to fail more often than regular drives.
Most physical items except for mail, photo albums and books need some sort of technology to play it and lets face it, that hardware is not going to be around forever. Does anybody even have a cassette tape player, VCR or vinyl record player? I don't, and I lost a lot of both music, movies and TV shows with their passing. That said the same problem exists with going digital though unless you take precautions. For instance anything proprietary will most likely not be around in the long run. I seriously doubt that you will be able to play anything you buy today on iTunes in 50 years as an example. However if you keep to open formats or make sure you strip away any DRM from anything you buy you should probably be fine. As long as there is an open source implementation to play the format you can be pretty sure it will still be playable while there is anybody still using it. As an example you can still play SID music (Commodore 64 game soundtracks), I doubt anybody has used that format in the last 20 years.
If you use any internet services (Photos is a good example of where this makes a lot of sense) you definitely have a problem of obsolescence there too but you can mitigate this danger by making sure that you first of all choose a service that allows you to easily export all your data in case you wish to move it. Also make sure you have a backup of your data. As an example I use Google+/Picasa to do all my photos and then use Backupify to back them up in case something goes wrong. A service that you absolutely should not use to handle your photos is Facebook. With this service there is no way to get your photos back in original size after you have posted it. Also you have their questionable track record on privacy to consider.
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