It's just a sensible thing to do; make sure you have three players who could play in any position. Lock, backrow, and wing are all pretty easy to have someone step in; they won't necessarily perform as well as someone who plays there all the time, but they can do a job.
But prop, hooker, scrumhalf, flyhalf, inside-centre, outside-centre, and fullback are specialist positions, and you will lose games putting someone there who isn't a specialist (or, at least, experienced). That's a big part of why you see teams pick twice as many front rowers as locks.
However, Australia is in the unenviable position of basically deciding between a third option at hooker/scrumhalf/flyhalf/outside centre who isn't good enough, or picking a talented guy who doesn't have experience there. Hodge is a great player, but I still have nightmares of him defending at 13, but do I have much more faith in Lalakai Foketi?
To be fair, I don't think any team could really endure losing their best two players in one of the key positions listed above. The third option is more a "please don't fuck it up in this game and we hope one of the other two will be fine for next game".