I guess we need to concretize this: Someone decides that the data on my system is valuable and wants to steal it. They find out that we're running on EC2 with

I guess we need to concretize this: Someone decides that the data on my system is valuable and wants to steal it. They find out that we're running on EC2 with backup to S3, and they want to locate the equipment. How in the world would they do it? I have no clue where the hardware is that hosts our service. Much easier to break into someone's office and get the equipment directly, or to break into a smaller host and grab the equipment. With the cloud, finding the actual hardware in use seems extremely difficult - which seems to dramatically increase your security against a hardware theft as opposed to self hosting.