This is a question everyone must struggle with when building out their datacenter. Storage choices are always the ones I have the least confidence in. David Marks in his blog You Can Change It Later! asks the question Should I get a SAN to scale my site architecture? and answers no. A better solution is to use commodity hardware, directly attach storage on servers, and partition across servers to scale and for greater availability. David's reasoning is interesting:

A SAN creates a SPOF (single point of failure) that is dependent on a vendor to fly and fix when there's a problem. This can lead to long down times during this outage you have no access to your data at all.

Using easily available commodity hardware minimizes risks to your company, it's not just about saving money. Zooming over to Fry's to buy emergency equipment provides the kind of agility startups need in order to respond quickly to ever changing situations. It's hard to beat the power and flexibility (backups, easy to add storage, mirroring, etc) of a good SAN, but Mark makes a good case.