P2P backup / sync has been done before (allmydata is another example from longer ago). It's that plus the appliance that makes Space Monkey unique, IMO.
IIRC what wuala did was give people more storage if they give up a part of their hard drive for other to sync with, so it's exactly the same model except without external hardware and more flexibility in choosing how much storage you want to trade off.
Wuala also keep a centralize server in addition to this P2P cloud so I think the purpose of the cloud was more for bandwidth.
it's one thing to pay money and gain space, but it's another thing to pay money and lose disk space you have. i feel like people are more likely to pick the former.