Comment by lukeqsee

This is because everything is in digital form. Essentially all government systems are digital-first, and for the citizen, often digital-only. If the data is lost, there may be no paper records to restore everything from land registry, business registry (operating agreements, ownership records), etc.

Without an out-of-country backup, a reversion to previous statuses means the country is lost (Estonia has been occupied a lot). With it, much of the government can continue to function, as an expat government until freedom and independence is restored.