For proper backups, backup to a local external disk (e.g. a time capsule or NAS) and an externally with incremental backups (e.g. Arq, Backblaze, tarsnap).
I use Arq, and the nice thing (in contrast to my Time Machine backups) data is also backed up on the go.
However if it's a choice between onsite and offsite backups, which practically speaking it is for most people, definitely offsite wins. The risk of fire, theft, etc. is vastly greater than the risk that Apple has a critical syncing bug and no ability to recover lost data. (Normally they keep deleted files around for 30 days.)
Yes, but it also happens that someone deletes a photo from a stream accidentally and does not realize within 30 days. For this reason, iCloud Photo Stream is not a backup - a backup keeps copies until the end of time.
Is a backup really a backup if it's onsite? You don't want a fire to take out your PC and external disk located in the same house.