isolation - Why is it important for mains power supplies to be isolated?

In all the computer power supplies and other power supplies I've taken apart, I've noticed they are fully isolated from the mains. Galvanic isolation through transformers, and often optical isolation for feedback. There is usually a very visible gap in the traces between the primary and secondary sides, at least 8mm across. Why is it important that these supplies be isolated?

Answer

Because the mains supply is very unpredictable, and can do all sorts of things outside its nominal specification, which might damage components or at least break the nominal design assumptions. A non-isolated design also has all its voltages referenced to one of the mains conductors, which might or might not have a useful/safe relationship to other potentials in your environment (like earth/ground, for example).

If the only stuff on the low-voltage side is inaccessible electronics, then non-isolated supplies are fine - they tend to much be cheaper/simpler than isolated supplies, and lots of household equipment uses them. Even things like televisions used to work like this, if you go right back to before the time when they had external video/audio connections. The antenna connection was the only external socket, and that was capacitor-isolated.

If a human being or 3rd party piece of equipment needs to interconnect with the low-voltage side of your design, then an isolated supply both gives you a clear barrier across which dangerous voltages won't pass, even in the case of component failure, and it means your circuit is now 'floating' relative to the mains. In turn, that means you can arrange for all the electronics to operate near ground potential, with all your interconnected equipment having at least roughly the same voltage reference to work from.