You've disastrously misunderstood what Colin is doing.

Colin "gets away" with "picodollar pricing" because he is deliberately segmenting away most of his customer base. I am not entirely sure why he is doing that, but he has made a strategic decision in the short term to make less money in order to build his service up more slowly and, I presume, carefully. He exclusively wants the kind of customers who will not be annoyed with this annoying price model; in other words, the kind of customer that has time to reason through the idiosyncratic pricing scheme of a new backup service.

Unless slowing the growth of your own service is one of your goals, do not mistake what Colin is doing here with a pricing strategy that works in the general case.