Looking at the location issue in terms of those who are just beginning family research (new customers): The place names on records in Ancestry's databases are the places where the event occurred. When folks new to family research attach those records to an individual in their tree they are likely to accept the indexed information contained in the location field when merging with the individual profile. They may not yet understand that geographical boundaries and place names have changed over time, and in this case it will not occur to them that they should first investigate to see where that place is on a modern map and change it accordingly. It will also not likely occur to them that during the merge function they may need to change the information in the location field to fit a "standard", especially if it has not been made clear to them that there is a standard. For instance, add the name of the country if that was not included in the record indexing as already mentioned. Another example would be to correct the spelling of the place name if it was incorrectly transcribed in the index (may not notice). I've had to correct the township name indexed for the record when the actual record image shows it was incorrect (newbies don't always open up and view the original record image). I've had to add the state name when I've merged indexed marriage records because only the county name was included in this field (the state name is known from the title of the record set).

Looking at it from the perspective of a long term researcher: Success in family history research is dependent on knowing where to look for records. It is critical to understand that geographic boundaries and place names have changed over time. An ancestor may have been granted land in Greene Co. NC, married in Greene Co. TN, married again in Jefferson Co. TN, and died in Cocke Co. TN, and never left his original land grant. Likewise it may appear your ancestor was moving to another township, county and/or state between each census when in reality he was living on the same farm. An ancestor may have lived his entire life in Frederick County, MD, and every record attached to him from the Ancestry databases supporting that location. However, if you looked at Frederick Co. MD deeds for the property he owned (not available on Ancestry.com) you would learn the land he owned throughout his life is in what is now Carroll Co. MD. I use my fact view timeline for the purpose of directing where I need to be looking for records (the government jurisdiction at the time - edit: and which jurisdiction has custody of those records now) as well as helping others understand these geographical boundary changes when they view my tree. I often attach deed images and historical maps to fact view time line events for this purpose, and include notes in the fact field stating the year the boundary change occurred. The fact view was my Life Story view (not just to illustrate locations but life events) and I know many others have used it the same way. It would have been awesome to see all this work transfer directly into Life Story (each fact associated with media that had been attached in fact view). Unfortunately that's not what has happened.