Here in the Netherlands a data center's power source (not even the machines) burnt down, data center is offline and University of Utrecht, one of the biggest universities here, is closed. Access passes don't work, work from home environment doesn't work, student information system is down, system for grading doesn't work. No failover for any of them (or maybe it was in the same DC?)
https://nos.nl/artikel/2613485-storingen-in-hele-land-door-b...
Backups can be sabotaged (turned off or schedules manipulated) or compromised (say, by lateral movement).
> Even if everything was hosted on Instructure's infrastructure, it's all AWS.
AWS Backup isn't foolproof. Get your hands on administrator credentials as an attacker and suddenly the only thing between everything being gone for good and unrecoverable even for AWS is remembering to have put a permanent deletion protection on all resources in AWS Backup.