And from the hacker's message itself, it's clear they want money in exchange for not releasing private info, not for the data itself.
Do we live in a fear based culture? Why the panic? Even if everything was hosted on Instructure's infrastructure, it's all AWS. I'd be VERY surprised if there aren't multiple way to go back to a previous state.
Most of the work and delay is to make sure they figure out where the breach occurred.