reddit goes down because they abuse(d) the shit out of AWS. judging cloud hosting by their failures is pointless. EBS is not meant to be a large scale memcached server.

i've done the "drive to fry's, buy a new server, restore from backup" type recovery. it sucks, you don't want to do it, but that's not what i'm talking about. if you're self-hosting at your office your run into all sorts of problems that datacenters solve. the cleaning staff at the DC will never unplug your server. you won't spill beer on it. if the internet goes down, they can fail-over to another connection, your office probably can't. the DC is closer to the backbone, giving your customers less latency. adequate cooling and smoother power means longer life for your hardware. and as you grow it's much easier to grow in a DC than having the server portion of your office gradually take up more and more space.