There's so many obstacles to hard link style backups with S3, this is just one of em.

Before S3, I backed everything up incrementally into hard link directory structures using rsync and loved it. Meaning, every day it would create a new directory structure full of hard links to the previous day, and then only "copy" files that had changed. That way I had like 20 inter-linked hot backups, and geometrically backed them off so I had data going back for a whole year! That's the real goal for me with rsync, s3, and hard links. I don't care about a couple of files that are hardlinked together, I want to leverage the concept of links to make the backups themselves more powerful. Like see
http://www.mikerubel.org/computers/rsync_snapshots/I think that once you surpass all the problems to do this on S3 (no renaming, no modification of meta data without a full re-upload, and a couple others) you will have a structure that basically treats S3 like a block device... although you might not have thought of it that way, that's what the solution would entail.
So the reason I am not pursuing these ends is, I think that eventually one or more of the "FUSE" type projects for S3 will mature to the point where it can be used efficiently as an rsync backup target (at least, with some modification). I think trying to coerce s3sync into being "smart" enough to solve these issues itself is ultimately folly and would warp the design/implementation so far that it would be trying to solve two rather incompatible problems with the same code base.
Would be thrilled to continue the discussion on this.
P.S. You're not using s3sync? Wow.. you've got to be one of the leading contributors to the community (here, and back on the aws thread). I'm honored, but confused... why the interest if you're not using the tool? Did you find something better? Maybe I'll start using it

P.P.S.: The memory usage of your innocent looking ruby snippet means it can't scale to the level of what I was talking about with intra-backup hardlink structures-- not that you intended it to necessarily.