I had to comment on this story because we, like everyone else, are struggling with the disposal of backup tapes that contain customer data.  Our solution, while unsophisticated, is doing the job.  I assigned one of the entry level technicians, who has a myriad of duties, to physically destroy the tapes while answering helpdesk calls and attending to other non-absorbing duties.

This is not a scalable solution and would not work for companies who have large backup tapes and reels.  The job would have to be outsourced.  But, for the small to medium sized businesses, this might solve the problem.  Our technician physically pries open the tape cartridges and pulls the tape out, cutting the tape into various strips, wads the tape up, and throws it in the trash (confidential trash that later is shredded).