Just because its too damn funny:

Microsoft/Danger will not have a backup of your Sidekick data, even if their servers crash during an update. All your personal data will be lost. Data recovery will *most* likely not be possible.

The irony?
The cloud computing approach was meant to store your data safely and redundant. (Yeah, I know, it wasn’t really a cloud – but they sold it as such!). And as if that wasn’t enough: Guess what T-Mobile offered as compensation? Right. A free month of Sidekick services. The company that just lost your data offers you to use their service a bit longer…

Sarcastic view?
They just did it out of concern for your data security and privacy. Deleting all data means they’re very secure. They’re so secure, Microsoft/Danger can’t even restore them.

Cynic reality?
Maybe the NSA has a backup. Doesn’t hurt to ask

Bonus idea?
The servers crashed during a failed hacking attempt of Paris H.’s Sidekick…

(Just some background: T-Mobile offered the Sidekick, and took care of the connection to the web. The Sidekick was being developed by Danger, who handles the complete data management in the background. Danger itself was bought some years ago by Microsoft. From first rumors (and I need to emphasize on that: rumors!) the actual server/backup solution was apparently done by neither of them, but by an industry leader in storage solutions. It appears that this industry leader botched an upgrade and killed the backup at the same time. That would make T-Mobile, Danger & Microsoft more or less innocent, but the story too funny to believe in such rumors )