I worked at a now deceased photo-sharing startup, and the stats were so bad. Most photos never left the device, meaning people had all of these important life moments in only one place. Lose or break your iPhone? All of baby's first whatevers, gone forever. Pictures of your mom's last weeks? Gone to the ether.

The part where I will disagree with you slightly is this wasn't just a problem of the barely literate, or even technical people overlooking backups. When we did user studies it was essentially everyone that came in - none of them had off-device backups, or knew how to share. The number of people for which "sharing photos" meant holding up the phone with a picture on the screen while the other person took a picture of the phone was depressing. The sharing UI was totally opaque to them. I see this on Instagram today, where people take pictures of the display on a DSLR in order to share the photos.

I apologize for the rant. I acknowledge this is a religious hobby-horse for me. At the aforementioned startup one of the stats that killed me was the average views of a picture once taken was essentially 0 - pictures go to SD cards to die. No better for phones. At the time Facebook was getting three or four Flickrs a week, and the stats were still pretty grim. We have to better serve customers, but I don't know what that looks like. Verizon offers a cloud-like service for contacts and photos (I have this on my Samsung U365 flip phone), but it's a pain to set up and unclear when it will cost you extra.

Bonus story: smart guy I worked with bought a really nice new camera, they default picture size was too big (too many pixels, too large files) to attach to emails, so he did the obvious thing: set the default resolution of the camera to something low enough to fit. WHY OH WHY BUY A 5 MEGAPIXEL CAMERA THEN SET THE DEFAULT RESOLUTION TO VGA? Because resizing everything was a PITA. Another unhappy customer experience. We (the industry) need to enable our customers, not frustrate them.