Why is it , in Indian cooking, it's a good thing that the oils separate?

Oil on top can act as a short term preservative that holds the moisture in and keeps the oxygen and air out. A lot of traditional recipes were developed long before refrigeration (or antibiotics) existed, when food preservation was a matter of life or death on a daily basis. Many kinds of foods and drinks we enjoy today came about to reduce spoilage and contamination. Other examples are beer, beer hops, wine and alcohols, salting, candying/sugaring, dehydrating/drying, and spicing. Many spices have antibacterial properties.