My backup drive (a Segate 2TB external HDD) has died. I’ve tried repairing it. No joy.
I can get a 2TB AirPort Time Capsule for £70 (about 90 USD) It’s pre-used from a reputable supplier.
I only need this for Time Machine. In my mind I’d be getting something that’s roughly the same price as an external HDD with some additional features. In the downside - it’s larger than an external HDD and needs continuous power.
What are people’s thoughts about this ‘ancient’ tech for my use case in 2023?
When Apple announced in 2018 they were no longer supporting the Time Capsule, I ran out and bought one of the last ones on the shelf at my local Apple store. But the Time Machine in it died last year. We are way past the support timeframe for this device. So I bought a used 2014 Mac Mini from OWC and shared a folder on an external disk drive as a wireless Time Machine target for my M1 MacBook Air. This and other options are covered well here:
I wouldn’t there were regular reports on this forum that backups to it weren’t the most reliable.
For me with backups it KISS. Keep it stupidly simple.
For local backup a directly attached drive should be the most reliable. But also always have an offsite backup of some kind.
Besides the Time Machine backup to a Mac mini, which is wireless and automated, I also have a collection of external disk drives that I connect directly for Carbon Copy Cloner backups made on my own schedule. And finally, I have offsite backup scheduled using the Arq Premium service.
While I think that Time Machine is is a wonderful feature that Apple offers on the Mac, it is only the first step in a comprehensive backup plan. The BackBlaze guys say it well:
I’ve found Time Capsule (the hardware) to be very reliable using Time Machine (the software). As @karlnyhus says, they’re old, so I installed a new 6 TB drive in my ATC and I expect it will continue to be useful for quite a while. I also have a few spares, which I’ve picked up here and there for 20 USD or so.
That sounds like a great way to get new life out of a faithful old servant!
Personally, I’d avoid buying something new that is past its EOL already. Think about a future-proof solution that you can ideally maintain as long as Apple supports Time Machine, which, ideally, would be forever.
I prefer using a NAS for centralized storage for my home network. There are off-the-shelf and DIY
solutions out there. I’m currently running the Time Machine service on a TrueNAS server which is running inside of a virtual machine on a PC hypervisor, but there are much simpler solutions - like Synology NAS - out there if you prefer.
Some other mentioned running TM service on another Mac, or even using an external HD for backup. Those work, too. Decide how much time, effort, and money you are willing to throw at solving this problem and choose the best option
It’s just good that you are backing your Mac up! My TM backups recently restored Apple Notes that I thought were lost forever!
How important is your data?
You would be buying used, outdated hardware which was only quasi-reliable at its peak.
They are a little biased…
I don’t disagree with them though. 
I was put off Time Capsule when I heard that the power supply can fail and then if under warranty Apple would replace it but you would not get the data back. Obviously this was years ago, they are now obsolete which is all the more reason not to use them.
I have a NAS and also several Samsung T5 and T7 SSDs. Today a 2TB is $114. No power supply, small and portable. I stick mine to a clear case on my MBP and use short right angled cables.