1) It means your users will complain that their account was hacked (even if it was their fault) and might cancel their service
2) hackers can exploit your system which hurts you (you are a VPS provider and someone mines crypto and you have to wave it for PR) or you run an email service and someone uses your app to spam (which hurts your email rep) etc.
2) hackers can exploit your system which hurts you (you are a VPS provider and someone mines crypto and you have to wave it for PR) or you run an email service and someone uses your app to spam (which hurts your email rep) etc.