That's what data hosting is. If they were doing webhosting, sure, but the article repeatedly states they were doing "data hosting".

Here's the company's web page detailing their data backup plan: http://www.cyberlynk.net/services_corporate/dsp_backup.cfm

What I'm saying is that whatever is in the contract is what matters. Data hosting, web hosting, data storage, whatever terms are used matter little.

EDIT: Case in point: We probably all agree that dropbox could be called "data storage", but they specifically say that backups and backup costs are to be done by the client (http://www.dropbox.com/dmca#terms), not by them.