Ah, here's a picture I was looking for earlier:
^--- 700 TB, or about enough for 35000 users at 20 GB each. We'll say that's sufficient.
WARNING! WARNING! WARNING!
HOOPYCAT IS APPLYING MATHEMATICS TO BUSINESS STUFF
That's about as dense as I could find in a recent
DSW. Based on my math (each server brings in 50*$20/mo, 40 servers per rack, 3 racks), the physical space is worth $0.17/GB/mo, fully loaded. (I don't think this is an unreasonable proposition; if the proposal were to replace one server with a non-revenue-generating thing, like a shelf or something, it would have to justify the loss of $1000/mo in revenue.)
Tough to speculate about hardware cost, but the DSW I linked to started with $1,000,000 for 100 TB of Really Fscking Fast SAN, and the 700 TB array is used by a television network. So, while it's 7x as much space, the performance requirements are much, much lower. Only data I can find
how much TB costs isn't useful, so we'll say that's $1,000,000.
To pay that back in one year, it'd have to bring in $0.12/GB/mo, again assuming 100% occupancy. So that's $0.29/GB/mo. If it's only half-full, we're looking at $0.58/GB/mo, before maintenance costs, service contracts, staff, support, platform integration, and profit.
This actually wasn't where I was expecting the math to go.
Something like the
BackBlaze hardware might be more likeable. This has the advantage of being much less expensive hardware-wise, but is much less reliable (by design) and requires much more work to make it go. So, at $4000/mo worth of space and $8000 per 58 TB (rounding the price up and using the actual RAID6 capacity), the same math would give 2900 users at 20 GB each, at $0.07/GB/mo for physical space, $0.01/GB/mo for 1-year payback, or $0.08/GB/mo for 100% utilization (or $0.16/GB/mo at half-full). That's getting closer, but it's going to be harder to implement than just "plug into LAN and push button", and even before the other costs, it's going to cost more than S3.
My assumptions are dubious, my math probably faulty. But, no matter which way you cut it, it's going to be more than just hanging a couple 1.5 TB drives out of the back of a server with some duct tape. There are hundreds of servers handling tens of thousands of customers in every single datacenter (maybe not Tokyo yet). Just the network traffic alone will be crazy. If we assume --- no, nevermind, I'm not going to do any more math here.