Your setup isn't a bad solution. It's pretty good and to be honest it's exactly what I've considered setting up with one of my technically literate friends.
The catch is, this solution only works well for an IT geek who can do it themselves. It doesn't work for the vast majority of people out there. Google would. An enterprise cloud-based solution also has a few less weak points compared to a homegrown one like this.
In summary, when you factor in time, ease of maintenance, and increased risk of failure, however slight it may be, the cost effectiveness of a Google Drive solution at the rates listed in this article holds it's own in my opinion.
You've neglected to consider the technical expertise and time required to implement, update and test such a system. Sure, maybe you can do it, but does everyone you know have the required knowledge? Most people can setup an automated backup job to a cloud provider quickly following a short video or walkthrough. Time's money and I don't value my own at a low number.
Additionally, regardless of what you think about the NSA spying or Google changing the terms of service, said companies will do a better job of keeping it secure, tested and updated than a non-IT geek will any day.
As long as you live in significantly separate geographic areas where a disaster won't take out both locations, that's a decent solution. Many people are not lucky enough to have someone they trust implicitly with their digital lives who happen to live on the other side of the country though. You're also betting that the drive at your in-law's home doesn't somehow die around the same time something bad happens to your drive. The chances are probably small, but how much are you willing to gamble on that? A Google Drive solution would work for pretty much everyone and Google takes care of the redundant storage with tested, offsite backups.
How much time do you and your in-law spend verifying and testing the backups and restore scenarios? Untested backups aren't backups. In my opinion, when you factor in the time required to setup remote access, secure the remote network, maintain and test restores, the costs of the increased electricity usage, additional drives and hardware, it's not nearly the money-saving deal it would seem at first glance. Personally, I'd rather pay a little more to use Google's enterprise class infrastructure and spend my own time on other things.