Environment Optimization: Eye-fi + Smugmug. One step wireless photo sharing and backup (at full resolution)

After recently acquiring an Eye-fi SD card for my camera, I decided to take the plunge and figure out a photo backup/sharing solution. I have relatives and friends that share photos using the various photo sharing sites (which inevitably try to make you pay for prints, shoot spam or advertising at you, and/or reduce the photos to a size that doesn't allow you to print a high-res version on your color printer).

Couple that with the fact that I've had 2 external hard drives die in the last 7 years, I'm tired of burning CD/DVD backups ad nauseam, I'm lazy when it comes to posting and sharing photos, and you can see my dilemma

In walks the solution . . .

As I'm setting up the Eye-fi, I see that they've done their homework and offered out-of-the-box integration with 15+ photo sharing sites. One of the sites they integrate with is phenomenal -- unlimited high-res photo sharing (SmugMug). I set my Eye-fi up to automatically create galleries on SmugMug. Here's how it works now:

1. My wife and I take some pictures at some event (wedding/family get-together/etc)
2. We come home, turn on the camera. The camera automatically, wirelessly (802.11 - no special camera usb cables!) transmits the high-resolution (8megapixel) photos to my computer. During transmission, a new SmugMug gallery is automatically created with a default name like "Photos taken on January 27th, 2007". The photos are automatically uploaded to that gallery.
   
3. If the photos are ones I want to share, I only have to flip a switch on that gallery and give it a name. If they are photos I don't want to share, I simply leave the gallery as is.

I set up a memorable smugmug url that I share with friends and family (thus reducing the e-mailing step normally necessary for sharing photos). The url is set up to not be indexed by google, not be visible to other smugmug users, or any searches otherwise. You have to know the magic url to get there. It's your own private, spamless, no-login, photo sharing site.
Now inevitably, the people that I've explained this process to so far have responded in one of the following ways:

1. I back my photos up to an external hard drive.
2. I don't trust photo sites . . .they've disappeared on me . . . How do you know they won't go out of business?
3. How do they make money?
4. That's cool. But still a look a of skepticism -- as if you have to be some tech guru to set this all up.
5. They store the full res photos????? (i.e. - How can they afford that?)

Here are my answers:

1. Hard drives have a limited life span. It will die eventually. What happens if your house burns down?
   
2. This is a profitable business focused on a discriminating user. They are a standalone company who's entire consumer base has bought into the specific services they offer. Go read about them and see what you think. Also, you can order a DVD backup of your photos at anytime (about $20). If you use the Eye-fi approach I'm describing, you'll have a backup on your computer anyway. For the more technical, you can mount your photo site as a virtual drive (WebDAV) and drag and drop backup photos to whatever other format you like at any time. They are not free. They are, however, fairly priced. $40/year for unlimited high-res photo storage and spam-free, login-free sharing. They claim the photos are backed up in three different states.
   
3. You pay them $40/year.
4. The Eye-fi makes it simple to get the photos there. You still have to learn a little SmugMug to get your sharing settings right, but it's quick once you get familiar.
   
5. You pay them $40/year. Hard disk space is cheaper than it has ever been.

To be fair, of the people I've described this backup/sharing solution to, two of them did have a geographically redundant backup solution -- Backup CD's in safety deposit boxes/relatives' houses.

Maybe I'm just a sucker for shiny things, but the almost effortless instant wireless photo sharing and backup at full resolution, for the cost of an Eye-fi ($99) and SmugMug ($40/yr) feels like a heck of a deal.