Why are you comparing S3 costs to "just" HDDs? HDD's aren't web enabled and require other hardware to run and keep running.

A more accurate comparison would be a BackBlaze Storage Pod [0]

[0] http://blog.backblaze.com/2013/02/20/180tb-of-good-vibration...

CapEx + OpEx together averages 3x retail cost of hw for a medium sized web shop, labor and electricity being the biggest costs in each respectively.

That's not enough. Don't forget that Amazon automatically duplicates your data in multiple physical locations.

True. Backblaze wouldn't be enough in a natural disaster. Interestingly, even S3 reduced redundancy claims 400 times the durability of a typical disk drive. [0]

[0] http://aws.amazon.com/s3/faqs/#rrs_anchor

Yeah, and the op-ex of a HDD just sitting there is like, zero, man. Totes cheaper than S3.

(You aren't just paying for raw HDD capacity when you give Amazon money to use S3. You're also paying for many of the things between that capacity and you, as well.)