How mad would you be if the power company turned off your power for several hours without warning, or if you woke up in the morning to find that you couldn’t take a shower? Pretty mad I imagine. I was just a little bit annoyed last night because my flickr backup wasn’t working. I couldn’t have retrieved anything from S3 if I had wanted to, but thankfully I didn’t need (or want) to.
What if I were building out a Carson -style startup using S3 for storage? That would have been 7 hours of downtime for my app too. Hopefully the beta testers weren’t too pissed off. Hopefully I wasn’t showing a demo of it to anyone.
This is why some of the hype over services like these are over-blown. You simply cannot build a business on a service over which you have no control. That control doesn't need to be physical, of course - lots of things are manufactured from parts that come from all over (just in time manufacturing). You think companies that build that way don't have service level agreements in place with their suppliers?