We wouldn't trust a cheap VPS provider with our data if they were offering storage at this price. What magical thing Google has that suddenly makes us all safe at this price point?
If you're referring to the service staying around, probably nothing convincing. If you're referring to your data being safe, probably the best, most battle-tested warehouse-scale data centers this side of the NSA. They restored Gmail data when they lost that [1] and nobody was paying anything then. It'd probably take co-ordinated airstrikes in multiple countries, ie world war to cause them permanent data loss.
[1] http://mashable.com/2011/03/01/google-sorry-gmail-reset/
Not really. I don't understand at all what makes it so expensive. As a student with no experience nor money I'm very hesitant, but I've actually gone over the costs of building my own online backup company. Even with harddives that never go offline (thus always consume power) and using consumer-priced hardware (no hardware at manufacturing costs), I think I can do it cheaper than Google does right now. The only requirement is having customers pay for at least ~15TB of storage space before it becomes profitable to host. At this "profitable" point I'm still not even making enough to feed myself, but it's a start.
Plus, Google can oversell their drives (and probably by a lot because there are only a few subscription types available), something which is not possible with pay-as-you-consume services like Amazon S3.