Watch out for the inflation rate! If inflation is at 4% your ING account is worthless and you're spending down your principal in real terms.
Believe me, I've been thinking a lot about that recently.
That said, your point is taken: There is some amount of money where you can set up some fairly risk-free, static investments and take out $X every year indefinitely. Just make sure you do a little more thinking upfront about how much money that is, and what static investments those are.
TIPS or I-bonds would seem to be the prototypical example: they guarantee a certain real rate of return (about 2% when I looked a couple years ago, though I heard it's gone negative with the credit crunch), so if you've got $10M or so you're guaranteed your $200k. Only thing you have to worry about is a government default, but if they do that, you have bigger problems to worry about than what happened to your money.
Believe me, I've been thinking a lot about that recently.
That said, your point is taken: There is some amount of money where you can set up some fairly risk-free, static investments and take out $X every year indefinitely. Just make sure you do a little more thinking upfront about how much money that is, and what static investments those are.