Conventional IT wisdom has always dictated that Tape Backup is the only way to economically backup large amounts of data, but does this still hold true in the age of ultra-cheap hot-swappable Hard Drives?

Hard Drive based solutions are MUCH faster than any Tape Backup solution.

The other HUGE factor is the fact that you don’t need to "rewind" a Hard Drive since it is random access.  This actually permits the use of bit-level backup solutions that let you maintain a synchronized copy of a file system without copying the entire file.

Most modern backup software will permit the use of Hard Drive based solutions.

If the hard disks are housed in a USB caddy then they can also be easily read from any workstation or laptop in the event of a disaster.