Stilly River Sage wrote: The router does offer an extra level of security...

Does it though? If the AT&T device is running as a router it will presumably provide the usual NAT 'firewall' and the USB disk will be on the 'local' side of it. But in passthrough mode, with no NAT, is there any additional security? I don't know. It depends on the device.

Personally, I wouldn't want a backup disk so near the internet. If I did use the USB port (I have one on my BT Hub) I wouldn't leave it plugged in. (We discussed backups and ransomware before.)

My 'NAS' (rather a fancy name for an RPi+1TB USB disk) is, as you say, essentially a Linux box so it has its own firewall. It's mainly a music server but takes occasional backups and cost ~£100. The disk is spun down when not in use. A proper 2-bay NAS is maybe 3 times as expensive but would provide RAID and would better cope with continuous operation - it you need that. But googling NASes I get the impression that they're becoming obsolete with the rise of cloud storage.

To your original question - what would I buy as a replacement router - I've had a good experience with Netgear. Before the BT Hub (necessary for using BT as an ISP and a good box, though unconfigurable) I used a Netgear DM200 modem and R6400 router. Netgear sent me the R6400 free as a replacement for a cheaper one that didn't perform as it should, so I've had support from them too. I've had many Netgear routers, and they've all been configurable in much the same way. But the last was 4 years ago.