An epic demonstration of missing the point
This is kinda the whole point... and it has sailed right over your head.
Lets disregard the fact that this user DID have a backup of his photos. That's no the point either.
The point is that world+dog is talking about could storage and productivity / thin client solutions as replacement for conventional desktop smart client. If this is to have ANY value at all, we have to be able to trust such large cloud providers (such as Yahoo, for example) to properly backup and secure our data. And to restore it quickly when they screw up.
If they can't, then cloud is ultimately useless.
FWIW, I can guarantee than any decent cloud provider will have a much more robust and resilient data safety and backup strategy than the overwhelming majority of home users. Furthermore, I'd be prepared to bet that many times more users have lost their photo data from their desktop machines due to disk & backup failure / computer theft, than have ever lost photo data stored on Flickr.
Yahoo obviously have a decent backup strategy. The only problem is that it took the user to kick up a stink in the public press before they restored that backup. Which is a bit worrying.