Except that the claims of strong AI 'real soon now' have been coming since the '60s. Current AI research is producing things that are good at the sorts of things that an animal's autonomic system does. AI research 40 years ago was doing the same thing, only (much) slower. The difference between that and a sentient system is a qualitative difference, whereas the improvements that you list are all quantitative.
Neural networks are good at generating correlations, but that's about all that they're good for. A large part of learning to think as a human child is learning to emulate a model of computation that's better suited to sentient awareness on a complex neural network. Most animals have neural networks in their heads that are far more complex than anything that we can build now, yet I'm not seeing mice replacing humans in most jobs.
Given that most of this code was originally targeting systems from the 1960's and 70's, I can't imagine there being an insurmountable number of lines of code
According to Wikipedia, Gartner estimated about 200 billion lines of COBOL code in 1997. To put that in perspective, that's more than the total amount of open source C code tracked by OpenHub.net. Can you imagine persuading someone to rewrite all of that C code in a newer language?
A store? Are you from the past?
Then, almost by definition, it is worthless
And yet it works in exactly the way Libertarians are telling us things will work: companies put an agreed-on label on their products, they have an incentive to check unreasonable-sounding claims from their competitors as do consumer groups, and there is redress through the courts (and bad publicity) if anyone is caught cheating. For once, it's a free market solution that is working with a minimal amount of government intervention.
This isn't the reason the cloud makes a terrible backup. The thing that you want to avoid with a backup is correlated failures: things that cause a failure of your primary store should be different from things that cause a failure of your backup. Your house burning down or thieves coming and stealing your computers will cause failures of both your original and on-site backups. It's a lot less likely that the founder of your cloud provider will be arrested for the same reason that you lose your laptop.
Remember: it only matters if your backup storage fails at the same time as your on-line storage.
Over the shoulder supervision is more a need of the manager than the programming task.