2TB or nothing for a single account with no family sharing that costs more than iCloud? No thanks.
I would consider upgrading my free plan if they had smaller storage tiers available at competitive prices. Even then it would be a hard sell since it isn't as well integrated as iCloud is on Apple's ecosystem.
• 1 TB OneDrive for one user.
• Install Word, Excel, PowerPoint, Outlook, Publisher, and Access on as many PCs, Macs, tablets, and phones as you want for one user (Publisher and Access are PC only).
• Also adds some features to OneNote, and gives 60 minutes per month on Skype.
For $100 year, or $10/month, you can get Office 365 Home. The differences from Personal are:
• You can add up to 5 family members, for a total of 6 users including yourself.
• Each user gets 1 TB of OneDrive.
Personal used to only allow the Office apps on 1 Mac, 1 PC, and 1 mobile device, but they removed those limits late in 2018.
Magic Pocket [1] makes the storage one of the cheaper parts of their capex/opex, so it's more prudent (hopefully backed by data on their side) to throw storage at users while pushing the average revenue per consumer user up. Could they lower the price while delivering less storage? Sure! Would they achieve the same margins? I'd hazard a guess they've run the numbers and the answer is no.
This seems to be the trend across some other providers too. Keep prices the same (or even increase it, like SpiderOak) and provide more space that most people wouldn't need or use. Effectively, they rely on people not using the storage quota fully.
As a end user, I can't understand or support not having lower price points with lower storage quota, family sharing, etc.