Why did you use my specific quote to launch your missive? Let's look at OP's comment I was responding to:
"Without that storage space, Groove streaming is essentially dead." He was presumably referring to the free space that is being cut back that he previously used to store his music. $2/month gives him 50GB, which is more that the free space he previously enjoyed. Hence, my comment that the difference between alive and dead is $2/month. OP's comment therefore smacks of drama queen hyperbole.
As to your comprehensive analysis, I agree with some of your points regarding how MS could have come up with a better set of tiers but it's pretty obvious to me that they are trying to establish the sweet spot at 1TB as the value there is way better than their competitors. If you don't like it, you can move to a different service that suits your needs. If you don't trust them, then move to another company that you trust. I would submit, however, that trusting any corporation is a risky venture at best. To use your derogatory term, one can easily argue that expecting 25-40GB of free cloud storage *forever* has gone beyond full retard.
You have your opinion, and I can respect that. Nevertheless, I am pleased that MS is getting rid of the data hoarders on the top end and the freeloaders on the bottom end because I have no desire to subsidize their usage. Whether OneDrive is now "dead" remains to be seen, but what is clear is that OP is unwilling to spend $2/month to solve his music storage issues and I don't really sympathize with him on that.
First of all, I apologise it was not directed at you and I was just speaking generally. You have your opinion like everyone else and I respect that.
If your gripe is why isn't this X user spending $2 a month for the 50 Gig option, you need to look from his/her perspective as $2 is all a lot money when you convert it to other currencies. Plus your looking at ($2 x 12) x Y number of years the user is using their service so it is not "just $2 a month". I do understand where you're coming from just you need to take into the OP's perspective.
In regards to which I would say is somewhat overly dramatic but he / she has point and may have been said out of frustration, anger etc.
Invariably he/she will speak to friends and family and then you have a chain event where what was initially said is lost in translation = user's moving to other services + more research into the service in question. The latter may lead to a few more subs to other services, who knows.
Furthermore you are not subsidising anybody's usage really, if you were going to look at it from that perspective then every bill you pay "subsidises" usage for some one else
as it goes to a "collective pot" and then spread.
With any storage service you are always going to get freeloaders and hoarders, that's a given and a undeniable fact.
Expecting 25 - 40 gb free {pretty much everyone was getting 30 GB} for eternity may not make no sense on the face of it however you need to be competitive and you need a appetising lure to get users to use your service. Especially since when recordings and photos are getting larger...
For instance photos don't count to your Google Drive limit on the proviso they are stored as "high quality" and even then there are some caveats.
That is what you call a rather attractive lure, what do OneDrive users have to look forward to now with these changes? hmm..
It's not simple as "if you don't like it, move to another service", as you need to take into account some people have a lot more data to move and may have to deal with capped broadband connections, slow connections and may need to shell out for external storage whilst they research or weigh up their options.
In terms of value, I agree that 1 TB + office 365 is still good value however that only caters to a certain audience (which may be a large audience, it is still a group never the less). However what you have now is a lot of unlimited subscribers that are now stuck with tremendous amount of data and now they have to spend a lot of time migrating; there couldn't have been a better mix for resentment lol.
OneDrive will of course will continue which is a given as the future is cloud first, mobile first however the next quarter's financials will be more than interesting to say the least.