I admit my solution might not be optimal with our current setup, but at the time it was implemented, it was the best I could come up with, taken the demands from management and customers into account. Price of storing in cloud and speed of wan were the "killer" issues at the time.
Having changed much to our environment, I will have another look into our setup.
@Kristen: the size of our databases are, what most databases experts will call small. The IO is on "dedicated" secondary lan and the setup capacity of the full backup, are well within acceptable margins. But you are absolutely right about the restore process - its much more difficult. Thankfully we only used restore when setting up test/demo (which is not that often).
@TaraKizer: speed is not the only factor - at least it wasn't for us at the time of implementation. But as our environment have changed a lot, it is definitely worth exploring(re-evaluating) our setup. Our SAN is currently due for retirement, and only used by fileservers. A new SAN (faster and bigger) is on my top 5 wishlist, in order to also have Exchange and SQL Server data moved to SAN. But we can't avoid backup, due to requirments from our customers.
But first, its vacation time (at least for me) 
Have a nice vacation when your time comes 