Peter,

Backup set is designed to have LAN-free restore capability for small and
remote clients. If you are going to use same resources
(library,tsm-server,network) to restore client then it's better not to
create backup sets. We can always schedule multiple threads to restore that
significantly reduces restore time. Backup set restore needs TSM client in
place prior to restore it doesn't need database.
It's not secure, if someone gets backup set media, they can steal your
sensitive data. It's not useful to restore OS unless you go for some
additional products like Bare metal restore.

Bandu