Sure, in theory. But in practice everybody's data is widely distributed. So I'm not sure what kind of event you're imagining that would take down one customer

Sure, in theory. But in practice everybody's data is widely distributed. So I'm not sure what kind of event you're imagining that would take down one customer's data and no one else's. It's not an issue. Whereas if you're warehousing all your data in a single physical location, it's vastly more likely for it to be fully destroyed due to a fire/earthquake/flood/etc.