Office 365 gives you a full office suite (including outlook) + 1TB of online storage + 50GB ad-free mail for 70$/year. According to complexity rules, 1Password shall ask for 36$/century.
This isn’t even a reasonable way to compare product pricing. Xbox Live Gold costs nearly as much as Office 365 Personal annually, and it is barely useful unless you own games to go with it. Or we could compare Office 365, at $70, to Apple iWork, which is free. Sure, Office has more functionality, but does it have infinitely more?
Office 365 operates at scale. Of course they can offer prices that low for so many valuable services. They have millions upon millions of users. The more customers they acquire, the cheaper it is for them to offer those services per customer.