It may be impossible for me to stress sufficiently the necessity of printing out a manuscript (or short story, or essay, etc.) and editing a version on paper. An invaluable, artificial distance is created by taking your work from the screen to the page, allowing for a wholly different experience of the text. This in turn creates the opportunity to notice problems our eyes may have otherwise skipped and frees us to make corrections we wouldn't have otherwise made. I can't begin to count the times I noticed issues in essays I wrote while in University only when I was about to hand in the printed version, and, unsurprisingly, the same holds true for my new novel.
In a sense, I feel safer making corrections on paper. True, I have backup versions of my file, which also provide a safety net, but any markings made on a paper draft are not immediately absorbed by the text as they would be in a computer file. An argument can be made for using the track changes feature, which does help differentiate between the original and a correction, but I feel that overwhelms the content, whereas written corrections flow around the printed words, easily standing out and seamlessly drawing attention to potential problems.
A printed draft provides tangible proof of hours of our work, which certainly doesn't hurt. Editing a printed version, besides providing such proof, offers as well an automatic chance to measure progress as the stack of untouched pages diminishes and the stack of edited sheets grows (along with a list of necessary corrections). This round of editing also provides a buffer for each correction – as each one will need to be inputted into the electronic file, each one can be reconsidered, perhaps to be altered again or ultimately decided against.
In the end, this round of distanced editing is both practically critical and emotionally fulfilling. Even the many progressively growing files housed on a variety of backup drives are not as impactful as this one printed draft.