This week's book giveaway is in the OO, Patterns, UML and Refactoring forum. We're giving away four copies of Refactoring for Software Design Smells: Managing Technical Debt and have Girish Suryanarayana, Ganesh Samarthyam & Tushar Sharma on-line! See this thread for details.
When you configure your SessionFactory this will process the hibernate.hbm2ddl.auto property and do what it is documented to do. So if it is set to create, it will drop all tables you have mapped and recreate them. It's normal to initialise the SessionFactory at start up, so when you deploy your web application this will happen.
What Aurelian is pointing out I think is that you would not want this behaviour in a production environment.