NAS should be fine. The major benefit of storage server is functionalities like media serving (streaming video to your media extender so you can watch it on TV), or business functionalies like DHCP and running transactional databases. If all you need is storage, NAS all the way. Just be sure you have a good backup process...perhaps two NAS's. That's my two cents anyway.
If your main focus is backing up pictures, I would consider a service like Mozy. If you want to later run a WHS box for streaming to HTPC's, I would build a NAS.
Mozy = cheap and simple, NAS = more expensive but more functionality.
NAS - May be limited to 2 - 8 drive slots. Upgradable? RAID may be limited to RAID 1 - 5
Hardware upgrades or opening the case may void warranty such as RAM/CPU. Warranty may only be for 1 year.
Features/Functions may be limited.
OS may be generic LINUX or WHS
May be more expensive compared to building your own server.
NAS may not include hard drives.
Buy/Add Hard drives/Configure/Start storing right away.
Build your own server - Customizable. Choose your preferred Operating System Distro.
Spend or limited your build to what you can afford and upgrade or add more drives in the future.
Buy/Build/Configure/Start storing.
Gain experience of building your own server and save some cash/maybe not?