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Sofar I have never heard about S3 actually losing data (apart from users erasing it). They store everything 3 times. But I would have a look at the cost/MB. Documents are usually small and important (thus, worth to backup). I have read that SmugMug, for example, stores it's files just on S3, with no backup.

apart from users erasing it

Very very important caveat, there. If you have three copies of the data, but all of them are in the same S3 account, a prankster who steals your S3 creds can delete all of them in about ten seconds.

Or, if you make a typing mistake, you can do that to yourself. Boy oh boy, will that be an unhappy day.

Diversify, diversify, diversify.

Very true. One instance I can think of is using the firefox addon S3Fox for managing S3. My co-worker came close to deleting a prod bucket with 80K+ images.

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