The Unofficial Apple Weblog took this photo of a 1985 hard drive at Macworld: $40,000 for 40MB, and... big:

(Admittedly, this has been exaggerated for promotional effect. The Mac II, introduced in 1987, only cost $5500 with a 40MB hard drive included. But still, we've come a long way.)
Follow the storage performance/size/capacity/price trendline out 10 or 15 years, and we get to the hard-drive that John Gilmore's been describing: the size of a sugar-cube, costing $1-2, powered off of the occassional hard shake, and capacious enough to store every word ever uttered, every song ever sung, every painting ever painted, every movie ever shot, and every word ever written, at a resolution that can be magnified into the microscale without distortion.
My prediction is that even then, we'll still complain about running out of disk space, and we'll still be too lazy to do backups properly.
Funny you should mention backups... The thing that's not keeping up is archival data storage like tapes. They aren't quite keeping up in size, but they're really not keeping up in transfer speed... By the time you describe it will (only) take 10 years to backup your sugar cube :-)
At $1-2, buy 50 of them, and set them up as raid drives. I believe (and would love to be corrected) that non-archival data storage transfer speeds have been increasing, so as long as you swap new ones in, and old ones out, you should be golden, no?
Yeah, but they're not $1 or $2 yet. The only consumer-level hardware RAID 5 box I've been able to find gives you 1TB of storage for AUD$2000 (LaCie Biggest Disk). I don't *want* 1TB (half would be plenty) but I want the redundancy, without having to sit there shoveling DVDs into the machine once a week. But I can't have it for a sensible price premium over what a nude 500 gig disk would cost me...
Why RAID5? If you are willing to go with a fast RAID1 (mirroring, which is fine for me in my home office application) La Cie also makes a splendid 500GB and 1TB RAID0/1 device for under $500 and $1,000, respectively. (I'm ordering the 1TB model).
And by the way, I still remember spending almost $4,000 on my first hard drive. It wasn't much smaller than the one pictured above, and it delivered a whopping 5MB of storage...
I guess along with tons of usefull information we will need more capacity to store informational garbage: "80/20"
The reason for the order of magnitude price hike is that it's not a hard disk drive - it's DASD (http://en.wikipedia.org/wiki/Direct_access_storage_device).