Google only needs to make money on average.
It's not at all unreasonable to think a company might offer a service where they make a profit on the average customer, but make a loss in some edge-cases. It's not such an uncommon model.
It's completely unreasonable to expect it to be sustainable. Why wouldn't Google eventually crack down on completely negative value customers?
When you use the actual numbers instead of a theoretical argument it falls apart even quicker. These are message board arguments, not ones you'd make with a straight face in person.
Because people with that much data know how much it costs to buy hard drives to store that much data.
Ask any of them how Google was supposed to make money off of them as a customer and watch them go for a gold in mental gymnastics.