Keefe, that picture is the BEST and sums it up pretty well!
One detailed reason I can think people are hesitant about having their surveillance video in the cloud- control of evidence. For example, someone trespasses and threatens me on my property, and I end up severely injuring or killing them and it's caught on film. If the recorder is on my property, I have more control of it, whether I can demand a warrant for it's seizure or determine if it accidentally got "lost". If it's in the cloud, who knows what the company will do with it. How much trouble will they go through to insure my rights are protected? If it's a really high profile case, who knows if some underpaid tech working for the cloud company decides they want to be an Internet hero and posts the video on YouTube anonymously.