Isn't it the job of the hosting company to backup all the datas in their server (I am not telling the client should not) and restore evry thign if situations like this occur....?

I think this is one of those mass defacements.......and its the hosting companys fault.........if they got in thru a hole in your site, the hosting company would have put all blames on you by now... and I believe its the responsibility of the hosting company to check what all craps are running on their server........just my 2c worth :-)