Yeah but once again this problem is statistical in nature. Admittedly the cloud isn't perfect but the question remains. Does the "Counter Party" risk outweigh the chances that my home spun solution would fail? Since the likelihood of failure on my part is orders of magnitude higher then the "counter party" risk would have to be huge, like really enormous. e.g Amazon would constantly have to be on the brink of imminent collapse. This is not the case.
If Amazon went out of business there is no chance at this point that the loss would be total and catastrophic. Its essentially a bank at this point. Its shutdown would be orderly.
The idea here, and you seem to miss this point entirely is that for your company to fail then both systems would have to fail simultaneously. That is why you have back-ups. Any one system can fail, but for two systems (both the original and the back-up) to fail catastrophically at the same time is statistically very unlikely, and with a back-up here I am just talking about a secondary system that just pulls the data in on a regular basis. Tarsnap or a simple script that stores the data in a set of directories, anything is better than nothing if you lose all your data. Rebuilding will still take time, but at least there is something to rebuild with.
For any one system to fail is perfectly possible and in fact should be expected to happen at some point and that's why you design against that.
You also make sure that it is not the same people that have access to both systems so that if your sysadmin walks onto the floor with a bad hairday your back-ups will still be there. And this is also why you test your back-ups to make sure they actually work.
And what you keep missing the point on is that Im not saying don't have a personal copy. I am saying if you have multiple copies the safest one is undoubtedly in the cloud and by no small margin.
Bank shutdowns are not orderly because banks are important; they're orderly because banks are heavily regulated. If Amazon has an orderly shutdown, it would be because of the selflessness of its owners and managers, which is a pretty fickle thing to bet on.
I certainly think this level of regulation is on the horizon given the number of businesses who use S3 as an authoritative repository. If Amazon needed to shutdown S3 even today I can see the government asserting a heavy hand in it.
If Amazon went out of business there is no chance at this point that the loss would be total and catastrophic. Its essentially a bank at this point. Its shutdown would be orderly.