I'm serious, they don't. They don't know that they don't, but they don't.
If you grab a co-workers iPhone and they have 2500 photos on the camera roll, then you know they don't. They'll just keep taking photos and assume "the cloud" or whatever is backing it up. For a time, it is. That is until their backup hits the mythical 5GB mark and iCloud starts pestering them to remove data or buy more space. Some people buy more space, but most just continue to ignore it and hope Apple has their back. I hate to break it to them after their iPhone takes a swim in the lake, but they don't.
Multiple companies are stepping up and trying to solve this problem in different ways, though.
Dropbox - It asks you on iOS and on the desktop to automatically upload photos. In fact, Dropbox will give you 3GB of additional free storage if you upload 3GB of photos.
Google+ - Google is largely doing the same thing as Dropbox, but only on iOS. They even mark the photos as private by default (good move).
Everpix - Just go read my review.
Apple needs to do one of the following things (in my opinion):
Buy Everpix and integrate that functionality right into iOS and the Mac. I love Everpix as standalone company, but a lot of people aren't ever going to hear about them unless it was functionality built right in by default. Also, photo stream needs to be reversed. Apple should store ALL photos/video taken with your iPhone and just store the most recent 1000 (or 30 days) locally on the device.
Make iCloud free for the total size of all the active devices backing up to that account. If I have a 16GB iPhone and a 32GB iPad, I should have 48GB available on iCloud for backups. If a device doesn't "check in" every 90 days, then that amount is removed from your quota. This would also be another reason to buy higher storage devices.
Make iCloud storage a terabyte for all users for free. This is virtually the same as number two, but giving you so much that you'll likely not run out for a decade or so. Yahoo did it for Flickr, why can't Apple?
The kids born 2010 and beyond (when the iPhone camera actually got good), will have a ton of pictures taken of them. Parents largely don't have a digital workflow that allows for backup, usability, and long term storage. Apple has always prided itself on making technology for regular people. This is a problem that regular people need solved. Photo storage and backup needs to be automatic and so easy that it's nearly impossible to screw up.
This post has been republished with permission from Bradley Chamber's personal blog. Bradley Chambers is the Director of IT at a private elementary school in Chattanooga, TN. He is also the author of Learning to Love Evernote. You can follow him on Twitter.