Google charges $10/mo for 200gb of Picasa storage. Dropbox is ~$16/mo (when paid yearly). Amazon Glacier is $0.01/GB/mo, plus data transfer costs (which are still minimal) - a $100 2TB hard drive plus Glacier backup gives you tons of local storage and protection against data loss in the event of hardware failure. You could even have a RAID-1 array of hard drives to protect against hardware failure (but not necessarily against disaster/theft, so Glacier or similar offsite backup would still be needed.)

In any case, there are plenty of good existing pieces in play.