What happens if the backup service goes down? Does the client have a way to recover backups from S3 directly (or from the data files I've pulled down from S3)?
If the backup service goes down, you can't get your backups. I have no intention of the backup service ever going down; and the data which I have stored on S3 is enough that I can bring a new server instance up even if I lose everything else.
As long as S3 doesn't lose any data, your backups are safe.