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Storage is just the loss leader of the internet, really. Companies will take the loss for access to the data.
Free storage. Backblaze is doing just fine.
That is why I called it a loss leader. It is meant to attract people to the ecosystem (hence free), not be the product itself. Of course if you are appropriately creating, pricing, and selling low cost storage as a business model, you will nail it.
And hosting
Eh, your average bear isn’t doing a bunch of hosting. Sure there are folks who do, but the vast majority of the population does not give a shit about hosting. They do care when you interrupt their photo/video storage, though.