Separate from the play for replacing tape, there's also the ecosystem strategy. When you run large portions of your business using Amazon's services, you tend to generate a lot of data that ends up needing to be purged, else your storage bill goes through the roof. S3's Lifecycle Policy feature is a hint at the direction they want you to go - keep your data, just put it somewhere cheaper.
This could also be the case where they think they're going after tape, but end up filling some other, unforeseen need. S3 itself was originally designed as an internal service for saving and retrieving software configuration files. They thought it would be a wonder if they managed to store more than a few GB of data. Now look at it. They're handling 500k+ requests per second, and you can, at your leisure, upload a 5 TB object, no prob.
But maybe you're right. The thing could fail. Too expensive. After all, 512k ought to be enough for anybody.
Clearly, with on-line differential backups - you might be able to do things more intelligently.
I'm already looking forward to using Glacier, but, for the forseeable future, it looks like the "High End" archiving will be owned by Tape. And, just as Glacier will (eventually) make sense for >100 Terabyte Archives, I suspect Tape Density will increase, and then "High End" archiving will be measured in Petabytes.
Thanks again.
The tradeoffs will be different depending on how many tapes you write and how often you reuse them.
Agreed - how-often you re-use tapes (and whether you do) - has a dramatic effect on "system cost" of your backup system.