Bridging the gap is always a pain. As a freelancer, I find that often I need to steer clear of "better" (though perhaps technically complex) solutions at times because I know it may create a panic when I leave. It's frustrating to "play to the crowd" but I have also found it can be just as bad to leave companies with elements their in-house employees can't figure out.

Irreplaceable is good. It means that person is a superstar. Keep them happy (and safe!).

One danger I have seen manifest itself when splitting code up into well defined areas is that participation in the code base as a whole drops significantly. You might get a few drive-by bugs between areas, but not the kind of serious review you give your own code.

Also, when one person is "responsible" for an area, one area is almost always the limiting factor (for development speed, quality, etc.).

Finally, having clear areas of responsibility like this mean that the manager of the developers can reinforce bad behavior (i.e. this bug is not MY fault, see, it is in HIS area). Then, everyone sits around and complains instead of someone just pitching in and fixing the bug.

I couldn't agree more. I think the distinction is that inherently irreplaceable people are irreplaceable no matter where they are put. Some people are irreplaceable just because they're the only one that knows anything about X.