Reliably storing a lot of data for a long time with low latency and high bandwidth worldwide requires fairly specialized hardware and talent. If you're not willing/able to invest in the proper hardware (which is very different from regular compute work), it's definitely better to hand it off to a 3rd party.
Looking at BackBlaze's posts about designing rack-mounted dense storage units and their reliability tests is very informative on how specialized it really can be.
And yet you'd think they have the numbers to warrant investing in it; Dropbox did too, and I read it saved them 75 million since moving to their own datacenters.
With the pile of cash they're sitting on, it may be worth their while to pay more for storage rather than having to try to staff up their own infrastructure. They've plenty of money - more than they can figure out what to do with, it seems - but hiring's harder.
$75 million isn't a lot, at Apple's scale. Especially since the entry cost could easily scale up into the billions (world-wide, high bandwidth, lots of storage).
This is a swag, but I imagine more content is stored on Dropbox than iCloud, potentially lowering the savings even more.
Nah it's all fairly off the shelf at this point. You can run Ceph on top of server designs from Quanta and already be at near parity with S3 under your own roof. You just have to want to do it; something I bet Apple doesn't care about yet
Backblaze only has one data center. The latency is high if you are too far away from it. Which is fine for a backup solution. If that data center gets hit by a meteor -- you're toast. Again that's fine for a backup, especially if you actually implement the 3-2-1 back up strategy that they are always recommending.
Looking at BackBlaze's posts about designing rack-mounted dense storage units and their reliability tests is very informative on how specialized it really can be.