I believe the way it works is you simply can't add any new (or update existing) files until you delete enough stuff to make the space available. They won't actually delete your existing stuff. (well i suppose if your account is inactive long enough and they have sent you enough warning email they might, way down the road, simply delete your account. But lets face it, storage is pretty cheap per GB now days. I doubt they will find it necessary to do that.

IIRC if you go over your limit you will not be able to add any more files. They won't delete them.

When you're over limit, sync stops until you remove some items.

How much cheaper will that space be in 2 years, due to the advancement of storage technologies and proliferation of storage devices?

They likely won't remove the files, just stop you from syncing until you remove enough files.