> It's probably a pretty large set of people, perhaps even the majority, since I'd suspect that most people don't pay for additional iCloud storage and can't fit their photo library into 5GB.

Large set? Yes. Majority? No. CIRP says 2/3 of US Apple users pay for iCloud storage[0]. It's this popular for the exact reason you mentioned. Almost no one can fit their photo library into 5GB so they opt in to the cheap 50GB for $0.99/month. 50GB is enough for a lot of people.

[0] https://wccftech.com/paid-icloud-subscription-is-apples-most...