Nanit needs this storage because they run cloud based baby cameras. Every Nanit user is uploading video and audio of their home/baby live to Nanit without any E2EE. It's a hot mic sending anything you say near it to the cloud.
Their hardware essentially requires a subscription to use, even though it costs $200/camera. You must spend an additional $200 on a Nanit floor stand if you want sleep tracking. This is purely a software limitation since there's plenty of other ways to get an overhead camera mount. (I'm curious how they even detect if you're using the stand since it's just a USB-C cable. Maybe etags?)
Of course Nanit is a popular and successful product that many parents swear by. It just pains me to see cloud based in-home audio/video storage being so normalized. Self-hosted video isn't that hard but no one makes a baby-monitor centric solution. I'm sure the cloud based video storage model will continue to be popular because it's easy, but also because it helps justifies a recurring subscription.
edit: just noticed an irony in my comment. I'm ranting about Nanit locking users into their 3rd party cloud video storage, and the article is about Nanit's engineering team moving off a 3rd party (S3) and self-hosting their own storage. Props to them for getting off S3.