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Several reasons. I am the only user of linux on my several machines, and it's a nuisance to go through a login screen every time I boot. Besides, I backup linux at least once a week with Drive Image and can restore a partition in a few minutes if a fatal error is made.
As far as firewalls, there is no completely secure firewall. Most if not all tutorials and books on the subject say the same.
I don't know if there is a way or not but I doubt it. (Runlevel 1 might do it but without networking). A person may have to write their own program though I think they would have to be able to edit the kernel itself. Linux and Unix are by nature multi-user operating systems.