"ugh, server failure at CrystalTech. And apparently their normal backup process silently fails at backing up VM images."
Why would anyone consider a backup on the same VM a backup at all?
All your data should be kept in two places, hopefully geographically disparate in case there's a building fire or horrible storm or what not.
You should also test it on a regular basis to make sure it exists (and so you know what to do when the shit hits the fan)
[Also makes me wonder how to test my host's backups]
Make your own, don't rely on someone else.