I heard from a Moodle partner (who provided server space for teachers) who turned off Moodle backups and relied upon server back ups. This was a few years ago when servers were slower.
The server that I am on now for the past year is so fast (4 or more cores, lots of memory) that I can use my Moodle and do backups at the same time. But until one year ago it would be difficult or impossible to use Moodle while a backup was going on. Since backups are generally carried out in the early morning, waking up early I would sometimes find Moodle unresponsive due to a backlog of backups going on.
On the other hand the biggest advantage of Moodle backups is that they back up a single course. If a teacher deletes an activity including user data, or restores on top of a course deleting all previous data, or a student vandalises a course, etc. then one can restore just that one course. Using server data one would have to restore all courses.
They also add another level of safety. So if you can perform them without harming the user experience then it is probably better to do so.
Having said that in 11 years of using Moodle with about 600 students a year, I have only used backups on two occasions. On one occasion an assistant deleted some user data from one course and restored the Moodle backup. On another occasion, we did not notice the problem until 5 days had passed and by that time the Internal Moodle backups contained the problem (I have my Moodles set to make 5 days of backups, perhaps that is the default). Fortunately the system admins had a server backup that was older than 5 days old and we used that.
Finally, as you know, the backup/restore system in moodle is not only for backups. It is for copying courses, resources and activities and moving resources between courses. If you do not enable internal backups, those with the permissions will still be able to do all these things.