S3 isn’t a hard disk; that’s EBS. S3 is ~17 copies on object-level-mirrored hard disks (allowing a choice of different mirrors per object, preventing overloading and rebuild degradation) attached to a lifecycle event queue, a load-balanced webserver cluster, and an async tape archive.

S3 costs pretty much what that infrastructure costs to run yourself.

But certainly, go ahead and run a Riak CS cluster (plus those other things) on top of some Herzberg servers, and try to outcompete S3 on price. I—and many others—will be waiting. :)