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. ;)