In this case they already have a CDN which keeps 1 or more copy's of their data already and they just want a backup which makes S3 cost prohibitive. (You can save significant cash by using a service which gives much lower bandwidth access to that backup data.)

PS: Honestly, if their custom solution only add's one 9 of redundancy that may be fine. Their CDN is probably at 98+% up time or so which bumps them into the 99.8+ range which is better than most services out there.