By that logic, you should keep only one copy of your data because additional locations/copies will be another point of failure and thus, a liability. Keeping a single copy of data you care about is always a bad idea, and I realize that's not what you're suggesting, but that's the logic you're using against cloud backup.
The cloud backup isn't the point of failure, it's the restrictions to get to it (i.e. your ISP, their ISP, their server uptimes, bandwidth/latency between the two, etc.).
Cloud is akin to taking an offsite HDD and setting it up so only an internet connection can reach it. Suddenly a whole bunch of things become issues that weren’t present before.
Cloud storage has it's purpose, and it's not for storing multiple TB of data that you frequently need access to. It's to create yet another copy of your data in the event that it is destroyed in all other locations.
I back up to external hard drives and the cloud. If I had a house fire, a dozen external drives with my backup data on it wouldn't help if they were all in my house. I back up all my stuff to external drives, and then stuff I can't afford to lose to the cloud.
An offsite HDD does exactly the same thing without any of cloud’s points of failures. If I’m at home it takes me ~15 minutes to retrieve an offsite backup, and around 1 hour to extract the ~500GB on it.
How long did it take Megaupload users to get their data back?
How long to download 500GB at 1.5GB/sec on an internet connection?
You seem to be confusing business and personal use scenarios. You talk about your home Internet connection and downloading a game from Steam... then you talk about server uptime and how critical it is to be able to access your backups. Well, you're not going to get five 9's uptime guaranteed with your residential Internet service or cloud storage service. If you want five 9's, you're going to have to fork over a ton of cash. At some point, you have to concede to something reasonable... for me, it's perfectly acceptable to have to spend days downloading data I can't afford to lose after a house fire in which everything I own was destroyed.
Why the distinction between business and personal use? It's my data and I need to get to it, regardless of the classification.
You seem to be saying “because it’s not business data, it’s okay if cloud fails you”. Well it’s not okay. My games are just as important as my source code.
Also, you're talking about downloading data from Steam, which is absolutely not in the same league as cloud storage vendors in terms of the availability of "your" data and thus is not even worth mentioning in relation to this topic.
It's very much relevant because it highlights the constant and real problems of cloud storage. Cloud based DRM is a subset of the bigger picture.
If Steam (or other cloud vendor) or my ISP has a problem, I’m cut off from my cloud data. That simple failure is all it takes.
OTOH to lose my non-cloud data, I’d have to have my house and work building burn down at the same time, or all four of my HDDs concurrently fail. Statistically both scenarios are almost impossible (and have never happened), while ISP/Steam failures have already happened multiple times.