Sure there is a market for backups and depending on which market you target it can be pretty lucrative.
For my own needs I use a combination of active/passive servers + offsite Rdiff backup (Hi Scott!)
For my customers (for their laptops / desktops) I'm looking to resell a decent backup solution.
The added value will be in the fact that I can personally set their backups up and help them with questions.
Many small tech companies should pick up backup solutions for their customers, it just makes sense.
I personally do not use back up services. I have servers in multiple off site DC's that I use for back ups. I just don't trust companies that may cut down on hardware to save money. A back up machine in my opinion needs to be the same as a production machine (RAC card, Hardware raid 1 etc.)
I have servers located in both the US and in the UK and i use a second hard drive as a backup solution in the same server. I also backup to an offsite location for extra piece of mind. This can work out quite costly so i charge a small fee for the site/files to be reinstated.