What if both the price paid by the user and thus paid to the miner is lower than S3, how would you arbitrage that? What would drive the price up to s3 prices? Scarcity?
There wouldn't be a direct arbitrage opportunity if the price was lower, but we have to remember there is a reason why S3 has been so successful. HDD space and CPU cycles aren't free. Plus there is the redundancy issue that others have mentioned. Amazon can help address this because they control the servers and can nearly guarantee their uptime. Filecoin doesn't mention any requirement of uptime for its users, so it will likely need to combat the problem by just throwing numbers at it. We then have the user's costs (electricity, wear and tear on their machine, and opportunity costs of doing something else) multiplied by whatever number Filecoin feels is enough to guarantee redundancy.
This is a long way of me saying I am not sure how much lower than S3 pricing they can realistically accomplish.
