I was playing co-op with my friend (local co op) and the PS3 crashed. After booting, my character was fine (I was hosting) but he lost EVERYTHING, his Barbarian lvl60 paragon 17 with 150k DPS is completely gone. Apparently the only way to get around this is if we would have saved our game data regularly somewhere other than in the PS3 itself. Shameful that there isn't a fix for this, after putting so many hours in a game, and the character is gone...
Local play is always playing in a void. If your HD craches, you lose everything. If something is corrupted, it's lost forever. That's how local works. People always complain about online 'DRM' play, but at least your characters wouldn't be gone. It's not shameful, it's how it works.
That really sucks and is frustrating but it's just like any other data, if you're not connected online and saving to a cloud then corruption and crashes can happen and data can be lost, whether it's a PC or a console or a phone or any sort of digital device really. I don't see how it's shameful. How can they fix you not backing up your offline data?
Always do regular backups - which is an option that's available to you, if you don't have PS+ available to save your data online. If you have PS+, I believe even if it's a local offline game, PS+ will connect once a day to backup online automatically.
I say shameful because this is the only game I have that crashes my PS3. Additionally, the recover file system option didn't work on rescuing the file (the file is there but remains unusable). Blizzard is aware of this issue but hasn't given ANY support to console players pretty much since release. If I would have known that I had to backup the saved game data for Diablo only (all my other games never crashed), I would certainly have done it.
Hard to convince my friend to play again and start all over from scratch... I suggested that he makes another Barb and I'll go WD, but the accent from the Witch Doctor is quite annoying lol .. can I disable his voice?