To put it in perspective, one family night out at a seafood restaurant costs about that much, and a couple of frappuccinos a month can add up to that much in a year.
Then again, a 5TB hard drive is, what? $119 or less? It's hard to figure the sweet spot, but the convenience factor is huge.
Trying to organize that using other apps would be difficult. Apple requires everyone to have an iCloud / iOS device. Other services require someone to sign up / download an app. Since most people have a google account already Google Photos was very easy for this use case.
Unless they boost the storage.
Cloud services are hilariously inefficient at using storage space. A 1MB image you upload might use 10MB or more of space amongst their servers. (eg. 1.5 RS encoded copies in each of 7 datacenters). Oh, and theres a good chance it'll be stored on SSD rather than hard drives because while you might think you only access that 1MB image once per decade on average, the reality is it probably gets read once a month (resyncing new devices, scanning quickly through the webui, ML models rebuilding search indexes, re-striping to new SSD's or rebalancing, etc.). Once a month reads for 1MB of data become spindle (IO) limited rather than space limited for hard drives, normally making SSD's cheaper cos spindles are expensive.