Interesting piece, Chris. If you don't mind, I'll try to add on a bit based on my perspective as a developer in this area.
Traditional big-box on-premise storage vendors also face another pair of closely related threats: open source and roll-your-own. The relationship between something like Isilon and something like Gluster (which I work on) is obvious, so I won't dwell on it. The relationship between something like Isilon and something like AWS is also obvious: more AWS usage means less Isilon sales. The relationship between Gluster and AWS, or any of several similar things on either side, is more nuanced. Sometimes people abandon their own open-source scale-out storage in favor of AWS services. Sometimes they deploy that same software within EC2. It's both a threat *and* an opportunity.
That brings us to roll-your-own. If you were to look under the covers at Amazon's storage offerings, I'm sure they'd look an awful lot like what's out there in open source. Ditto for Google. Ditto for Facebook. And Twitter, and LinkedIn, and so on. The fact is that the techniques for doing a lot of this are now pretty well known. Many of those techniques were developed are refined at the aforementioned companies, each of which has rolled their own not once but several times to address various needs and tradeoffs. I've seen a public presentation from GoDaddy - not generally regarded as a company in the vanguard of storage research - about their own home-grown object store. I know of many more that I can't talk about. Perhaps the biggest threat to both traditional storage vendors and someone like me (or my employer) is not some one new product or project but the general idea that scale-out storage software can be assembled rather than developed. That doesn't mean there'll be no place for people who know this stuff and can assemble those parts into a smoothly functioning stack, but we'll be providing less of a product and more of a service. As in so many other areas, increasing levels of automation might put customization in the hands of more than the elite.
"Good morning, madam. What kind of storage system would you like me to build for you today?"