That failure rate is for EBS drives, which are essentially hot disks. EBS drives can almost instantly snapshot onto S3 backup stores. Amazon has said they've n

That failure rate is for EBS drives, which are essentially hot disks. EBS drives can almost instantly snapshot onto S3 backup stores. Amazon has said they've never heard of anyone experiencing data loss on S3. So if you use EC2+EBS+S3 properly, you should not ever experience data loss except data captured since your last snapshot to S3 (which should be extremely frequently).