Similar argument could be used against staying local: are your engineers as capable at data retention as Google's? What if your in-house people screw it up? Will you have some remedy that isn't available to you if Google had screwed it up?
If your in-house people screw it up then it means you don't value the data very much. If you say you value the data but don't act like it, it means you don't value the data.
If you really, actually do value the data, then the best way to assure its safety is to take control of it. One company I worked had a practice of taking a set of offsite backups to an emergency facility, restoring the data and doing some sample processing. Every month they did this, without fail. That's caring about your data.
You avoided the question: what if something goes wrong with your in-house process? Is there anything you can do vis-à-vis your employee that you can't do to Google? Is that worth the price of keeping that person on your payroll, drawing benefits, driving up your costs? Would you fire them? Worth the employment claims risk?
These are not binary decisions. People vastly overestimate the value of doing things in-house. Most of the candidates for those "in-house" data management jobs couldn't cut it at Google. Why not leverage Google's HR and recruitment, training, and expertise in infrastructure operations to your benefit, esp. when you consider:
(1) that your own hires offer you no better protection; and
I didn't mean to avoid that question. I think I answered it implicitly: if you care about it then take control of it.
There's a lot that you can do about your employee that you can't to with Google. You can educate them, align their motivations with yours, etc. You can review the process and make sure it doesn't depend on one person. The list goes on.
Of course there are times to outsource. Times when practicality makes it necessary, when money makes it desirable, and so on. I do not take issue with the very idea. Sometimes it's the right choice. But sometimes it's the wrong choice.
Cool. It sounds like we draw that line in different places. I think your comments about aligning motivations is universal, and applies regardless of whether or not a services is sourced. My position is the illusion of "control" by assigning tasks to full time employees is almost never worthwhile in light of the enormous costs and risks of putting someone on your payroll. When a disaster strikes and you're caught empty-handed, you'll either be firing an employee, or firing a vendor. It's a lot easier and is less risky and it costs less to fire and replace a vendor.
But if a problem occurs in-house, I feel like it's under my control!
I'd rather have a 1% chance of losing my valuable data if I feel in control than a 0.1% chance of losing it while feeling like there is nothing I can do about it.