I.e. instead of VMware it'd be more useful for us to hook in with a FUSE-layer or a patched variant of a filesystem such as GlusterFS.

You're of course correct about the pricing. Their current prices cover some middle-ground but would need to be discounted to make it feasible for larger deployments. However, at the low-end (your 20T figure) the price seems already justifiable when you factor in staff and infrastructure costs (rack+power alone make up for half of the difference).

1: the dell at $7k does not include power, and your 12 2Tb drives gives you 20Tb usuable with RAID6 (loosing 2 drives). if you loose more than 2 disks, you are screwed... so, you need to back that up somewhere... 2: you need someone to manage that machine also... 3: ESXi, for what you would need here (8gb ram or so) is free, unless you want support....

i think in all fairness, that depending on the amount of storage you need or want, its swings and round-a-bouts... i like the idea, but i would also like the idea of having a box in house with a lot of storage (like the big dell) and only select some parts for off site backup... this is what i do... most of my stuff is stored locally (RAID 1, Thecus NAS, Drobo) and only important stuff (music and videos i bought, photos i took, etc) is backed up to the "cloud"...