Having just helped a friend who was miffed at the idea of spending money on a new UPS for >$5k worth of networking equipment: do not be surprised.

Penny-wise pound-foolish.

Unfortunately it sounds perfectly plausible to me.

"Why are we paying for backups? The database has never failed (yet)"!

Sounds completely possible to me - I have worked in a lot of environments and at some places I've seen decisions that make cancelling backups look like an act of genius.

One interesting observation I can make: no correlation between excellence in operations and commercial success!

You would be amazed if I told you how many "vital" services are like the blog writers former employers: One button push from destruction.

I've seen something like this. It could be a situation where they were transitioning from that backup service to their own server or another service, and the move was never completed due to some hiccup or priority change.

But if no one is watching to ensure the move was finished (or they got distracted), then something many people treat as set-it-and-forget-it could easily get into that state.

I don't think it is that far-fetched. I've had experience with a well known company that does millions in revenue per week (web based shopping cart) that just FTP's everything with no DVCS. Designers, developers, managers all have access to the server and db.