Travis Swicegood:" Amazon's S3 service is experiencing it's second outage of the year. According to Amazon's status site, they're been down for roughly 6 hours right now. Sites like SmugMug are completely down as they rely 100% on S3 to serve photos from.
Avatars on Twitter are broken because Twitter uses S3 to offload that
content."
Arguably you could be surprised those services aren't using a caching proxy for hot files (typically they would be the recently added ones). But I suppose that would feel like running your own generator.
Or you could look at it this way - S3 is more like an offload of deep storage - instead of buying that honking great filer, you rent it. But a filer's not neccessarily the first port of call for serving files.
(10 minutes later) Oh, here's an update via Gigaom:
"Amazon S3 is used heavily by a number of services behind Amazon’s
retail websites. Those services were impacted, but the retail website
did not show noticeable problems because it mostly uses cached data."