(I am not saying the story is true, but...)
I work in IT dealing with the daily backups (and restores) of data for a mid-sized company. The story could be true if the following were true in their enterprise:
1. Their backup software resides on the same SAN as the actual data. (Very plausible.) This would erase the "catalog of backups" and the actual backup program at the same time as the data. (Formating an entire corporate SAN is NEVER done.) If backups of the backup software's catalog were not done correctly, or if paper/other records of these backups were not kept, then trial-and-error of "which tape to use" would be the only solution to get the data back.
2. Same situation as above, with the data and backup catalog being deleted/corrupted at the same time, but this time the "former employee" at Danger was the Backup Administrator. Due to his/her position, he could easily have destroyed/corrupted all records of the backups. (This could have been done manually... OR... as the suggestion states, with a time bomb program.) Again, paper (or other electronic records, such as emails to multiple parties), are the only solution to correct this one.
In short, if Danger's corporate policy did not require more than one person to be involved in the backup process (even X years ago prior to the merger), and "other forms" of records were not the norm now, then this is plausible.