How the hoster lost our data

Not a very pleasant situation occurred the other day.
About 3 months we rent VPS from masterhost. Last Friday, the site suddenly goes into a deep down.
In the mail a letter from the caliper:

Dear Sergey, we inform you that today, as a result of a hardware failure on the physical server where your VPS v6553 is located, the integrity of the disk system data is violated.

Work is underway to restore information. Deadline for the completion of the work, unfortunately, is not possible to report. We plan to do everything possible during the day.

')
We are waiting for 2 days. On Sunday, the site still does not respond ... we are writing to the hoster a letter.
"Answer" comes only on Tuesday:

Hello Sergey!

After changing the operating system access to your
v6553 virtual dedicated server has been changed. Access to it by
SSH protocol can be obtained at any active IP address with
using the access details below (list of active
IP addresses located in the control panel):

Login: ****
Password: ****

- .masterhost technical support

OS changes? What? I call technical support, ask what happened and is the data intact?
They: Well, you reinstalled the OS, so of course there is no data left.

I reinstalled ??? I did not reinstall anything.
I asked them to double-check again - empty ...
The site and the entire database, which spent dozens of hours of work flew away! There are no words!

Let our fault in this too, we could buy a backup server for 300 p. per month and set up data backup, but is this a normal situation when a serious hosting provider cannot ensure data integrity?