They are planning for when things go wrong, which is why the landing ship is unmanned and in the middle of a big exclusion zone in the ocean.

I'm talking about the economics of failures. Insurance prices will go down, the cost to orbit will be cheaper. Could probably land at the Cape, decreasing turn around time. We'll have flights everyday!

The explosion isn't going to cause significant damage to the landing ship or the landing pad. There isn't much fuel left onboard at that point anyway, so it's fairly superficial. The rocket is scrap if it falls over regardless of whether or not it explodes, and the explosion won't hurt much, so there's not much reason to put effort into reducing the risk of an explosion in a crash. The plan is to eventually land at the Cape once the technique is proven, but there's no need to make a rocket that can tip over without blowing up to achieve that.

Ok, just thought the rocket could be salvaged if it didn't get blown to pieces. That's the goal. Reusable rockets are going to lower the cost.

I think that once it falls over, it's scrap. There's so little margin that once you even suspect things are bent, you pretty much have to rebuild it anyway.

I imagine making the rocket sturdy enough to withstand falling over would be prohibitive in terms of both costs and reduced capacity, so it makes sense to them to ignore this problem completely and work on perfecting the landing so that the rocket does not fall over.