It’s pretty simple. Selling storage is a crap margin business. The provider makes no money on selling you those lower tiers. They only make money when you upgrade and buy more storage than what you use.
They don’t want to sell you a cheap commodity. They want to sell you convenience at higher margin.
> The provider makes no money on selling you those lower tiers.
Is that true? I'd be shocked if it costs Google more than $2/month to have the average 100GB user's files sitting in storage. Maybe if I was constantly uploading and downloading, but most people push things up there and then they just sit.
Yup - its 100 GB * 3 (well * 2.5 to 2.7 with erasure coding) + networking, power etc. etc. etc. Data is constantly being churned around as machines are serviced/die, disks are scrubbed for bit flips etc. and its not like you can put it on a tape on a shelf - the user expects it to be instantly accessible.
Google Cloud Storage is $0.02/ GB + a myriad of other charges for listing, accessing, replication etc. All while storage remains one of the lower margin offerings for the hyperscale clouds - they keep it cheap to attract high margin compute.
Now add to that the cost of building and maintaining the myriad of apps, APIs, integrations etc. for a consumer facing storage service and $2/mo for 100GB would be very very slightly profitable at best.
They don’t want to sell you a cheap commodity. They want to sell you convenience at higher margin.