You'd be buying something like an EMC vMax that can sustain 1M+ IOPS on lots of 15K spinning drives, with caching tiers on crazy expensive flash.

To support that, you need a fibre channel network layer and a bunch of FTEs to attend to it. Usually compliance requirements require segmentation of roles, which increases cost. If you're a federal government entity, those FTEs are most likely contractors billed out at $125-300/hr. Figure $3-5M/year on labor costs alone, although that may be divided out over multiple systems.

This happens in commercial business too. I had a buddy who was making about $150k in NYC to zone luns on a SAN. Basically he kept a spreadsheet and updated a specific configuration setting 2-3x a day and spent about 60-90 minutes/day doing that. The rest was waiting or studying for his MBA.

It's pretty wacky to compare S3 to this type of storage.