Wow, this a huge topic of debate, so please bare with the long answer. The question of "Dedicated NAS vs Router with USB HDD" is extremely complicated and nuanced"
These are the key questions:
How much money do you want to spend?
A 2 bay nas cost $150. 2 x 4 TB hard drives will cost you $200. $450 total.
You already have an external hard drive, so buying an external 8 TB hard drive cost $150. Three times cheaper.
What level of reliability do you want?
The NAS can be set up as RAID 1 for better reliability. It's been said many time before, but RAID 1 is not a replacement for off site back up! Common causes of losing data:
1. Accidentally deleting/formatting/corrupting everything
2. Total hardware failure due to random events. Dropping it on the floor, overheating, any parts in the NAS or HDD goes bad.
3. Burglary or Fire.
You must have off site back up if you want to protect from these major sources of data loss. RAID 1 will only protect you from a fraction of the catastrophe, but offsite back up protects you from nearly everything.
What is your tech savvy level?
The NAS will guide you through everything. If you use a router with USB, you are mostly on your own. You will need to set a FTP client to back up and access your data. If you don't know what this means, prepare to spend a lot of time researching and troubleshooting. Being your own IT is not as easy as you think it is. There is a reason why services such as OneDrive, Dropbox, Carbonite, etc exist. Offsite back up is time consuming and difficult when you try it on your own.
Do you have friends or family who you are willing to share files and hardware with?
Doing your own offsite back up is much cheaper and easier if you have a person you can trust to store your files, and hardware. I have a close family member who has my data backed up on their FTP server. We back each other's data on each other's server. We back up every month. The only way to lose data is if both of us experience a catastrophe at the same time. (One catastrophe could be family betrayal haha)
Do you intend to use MAC, windows, android, IOs or a combination?
You will need to do a lot of research on file system formats and FTP servers/clients. I did a lot of research, and I ended up using:
ExFat formatted USB hard drive running of Router with built in FTP Server. This sever will serve clients across all platforms.
Windows 10 client backing up with ExFat hard drive using WinSCP
Max OS client backing using Cyberduck with MAC formatted hard drive.
Android phone using Turbo Client to access data.
Do you require media streaming capability, or just back up and restore?
The NAS will have far more advanced features for streaming. The Router with USB will only be able to do FTP file server.
What level of performance do you want?
The number one limiting factor is internet upload speed. This will dictate how fast your files can be sent out. (This is for remote internet WAN performance)
If you use a paid service such as Dropbox, you will get much better internet WAN performance. The Dropbox servers can feed out data much faster than your home internet.
Second biggest factor is router performance. The CPU and the WIFI chip will greatly affect performance. The client WIFI chip also makes a big difference. (This is for local access performance within your LAN network)
Lastly, hard drive speed will be a small factor. Most HDD will be about 100 MB/s and SSD will be around 500 MB/s. This is a minor point because the speed of the hard drive is usually not a limiting factor compared the the other two.
