For $125, which is also about the price of one year of cloud storage, you can get a hard drive big enough to store half a million photos and also back up a million photos. It probably won't ever go over $200.

And the hardware to serve that hard drive is somewhere between free and another hundred.

Sure, but then you're putting all your eggs in one basket (hard drive). If you really want to divest yourself of the cloud then you need to set things up in a redundant and fault-tolerant fashion. And at that point the outlay is much more than 'just a hard drive'.

Yes, you need two hard drives. If you’re really paranoid, use three.

That was already covered in my top level comment though. Geographic redundancy not local mirroring.

Did you skip the "back a million photos" part? That's at least 3 copies of every file, spread across your group. If you want maximum safety you can add a local backup too, which isn't much more money. You don't need to spend anything on fault tolerance. Your files should already be on multiple servers, but also if it goes down for a few days that isn't a big deal.