That is VERY unfortunate. I back up the II with my backup file, and it is about 4 GB. I know Bert and some others may back them up separately. I certainly recommend NOT using the cloud if it cannot back up II successfully. Bert has many ideas about using RAID drives.
Why couldn't AC offer incremental or deduplication for the IIs?
I always warned about this. We developed a backup service that lets you backup the II (incrementally) and database completely. So it even works for people with slow DSL connections. We also do an added bonus of providing a cloud failover for you local server in case something happens to the server in your office.