Business and enterprise customers may be moving in that direction, but I don't think the majority of Home users have any interest in Cloud file storage, as evidenced by the many opinions expressed in these forums.
As a business/enterprise customer there are files we are legally (to this point, we will see how the future catches up) not allowed to save to the cloud. As such, backups and redundancy are important, but getting the end user to always cooperate with this
task is not a sure thing.
I've seen a lot (and I mean a lot) of "blame the user" responses on both the Feedback Hub and Social Media sites (Twitter, etc.) - backups are a vital part of the computing experience but so is not deleting a ton of files during a routine update.
This is a pretty prime example of why a QA team is needed. Microsoft is not a startup, offloading all of this on to the consumer is not a valid way to do business. Further, it has since come out that multiple users reported this issue on the correct channels
but were essentially ignored.
We've rolled out a new GPO solely based on this issue that blocks all updates until fully validated by our internal team, step two will be to look elsewhere for enterprise solutions.
There's a false dichotomy being created here. It is an unforgivable thing that MS allowed to happen,
and it is a mostly unforgivable thing to not have a conscientious backup plan, especially since we know that MS has a history of this kind of failure.