Compared to Hetzner. Not a cloud provider, but a root server provider. It's also more expensive than Strato - also a root server provider. Of course, not with the same availability, but for most startups it's more than enough.
You compare a hoster for servers with a storage solution. Don't get me wrong, I know that hetzner offers cheap iron and it's really amazing, but all this comes at the expense of the network and the support.
RE: S3 – it scales any time and on demand. I can upload 2 TB starting now and don't have to order a server which may or may not be around on Monday (tomorrow). You could compare S3 to something like Rackspace Cloudfiles or Nirvanix. Your Hetzner argument makes little sense – not even as far as TCO is concerned.
Also, good luck recovering your servers and storage array on a public holiday in Bavaria. ;)
Yes, you are right: if you need all those things you mention, than hetzner is not an alternative.
However most startups an small busnisses don't, and maybe never will. I mentioned Hetzner because it's the most known here, but there are many other similar providers.
I'm using several Strato root servers since almost 10 years and never had an incident so far, even if it's "low" availability.
Whatever stack or solution you want. IMHO what matters is the monthly bill: everytime I tried to use something from Amazon, I ended up paying too much. Of course, this is all relative and very subjective :).
