Re: save-excursion doesn't restore point

[Richard M. Stallman]

    I would guess that this is because save-excursion uses markers, and
    those markers then get invalidated by shell-command-on-region.

I think so.

                                                                    But
    it's still a little weird.  Is this a bug?
    
I think it is simply inevitable.  If all the text is replaced,
Emacs has no way of knowing what new position corresponds in any sense
to some old position.