I've just created an account just to comment on that. I'm working for different NGOs helping them with their IT projects. Recently one of them asked me to create an equivalent of iTunes store (with the multimedia files available for free to the members). One of their guys was hyper enthusiastic about S3. But no matter how we calculated it, Hetzner was (much) cheaper. Now, the service has been running for over a year on Hetzner services and everybody is very happy. There was one incident (the motherboard on the server died - they replaced it very quickly), that's all. We have all the options we need. Note that the current setup is fairly small: we're serving ca. 4 TB of data to ca. 4000 members.

Now, when people say that S3 scales well, I totally agree. But why do they say that the prices are competitive, that's beyond me. Take Xirra's XS-12 storage (200€/month for 36 TB) and compare it to storing 18 TB (I assume RAID 1) on S3. 1 TB costs $95 on S3! How on Earth can you call it 'competitive'? Now, that's even without bandwidth costs. I totally agree it's a premium service for a premium price. There are plenty of cases when using S3 is just a big waste of money. (And Amazon's decision not to implement cost capping isn't helping either.)

Is that for an S3 like service that you can just upload an unlimited number of static files to? Or do you have to maintain a server too?

Well, if you buy a server or hosting from Hetzner and want a similar setup as S3, you'd have to purchase multiple servers for redundancy. With S3 (and especially CloudFront or other CDNs), you can pay a minimal amount to have all of your files redundantly stored with an extremely high availability (and/or with multiple geographic locations).