Why is it not advisable to have the database and web server on the same machine?

Question

Listening to Scott Hanselman\'s interview with the Stack Overflow team (part 1 and 2), he was adamant that the SQL server and application server should be on separate machin

Answer 1

It depends on the application and the purpose. When high availability and performance is not critical, it's not bad to not to separate the DB and web server. Especially considering the performance gains - if the appliation makes a large amount of database queries, a considerable amount of network load can be removed by keeping it all on the same system, keeping the response times low.