That's right. The main point is that these services still benefit from the falling cost of storage.

Suppose the prices of _x_ amount of storage was halved recently. If they stored their data in three replicas, shouldn't their price become (1/2)^3, or 1/8th the original price? That would only serve to prove his point further, or I'm missing something.

provider1=[d1,1][d1,2][d1,3]

provider2=[d2,1][d2,2][d2,3]

provider3=[d3,1][d3,2][d3,3]

Each drive cost $x. You have 9$x = cost to store 1 drive of data, across 3 providers, who each store 3 copies. If drive prices halve, it's still 9$x.

I don't think anyone is proposing 3 providers, who each store 3 copies. Either use one provider who stores 3 copies (Amazon) or three providers who each store one copy.

"People always conveniently forget as well that when you store data at S3 or Rackspace they're doing 3 replica's. If you store 3TB's, its not just the cost of a single 3TB drive..its 3x. To do it at home you'd need to buy 3x3TB Drives @300$ each."

Existing companies store multiple copies transparently...Either way, 1 copy or 3 copies, I dont think the math is wrong. Just change from 9$x to 3$x.