To give you some perspective: I have a popular open source project hosted on Google Code. I host my binary downloads via S3 and since it's popular, it costs me $200+ a month in bandwidth.
If I used Google Code for hosting those binaries, Google would have to pay for that and why should they?
And that's a grey area example i.e. I would be using the service as it was intended to be used.
I'm pretty sure plenty of smart alecks simply abuse the service by putting and random stuff there to avoid paying for bandwidth.
This is a tragedy of commons: Google offered a free service, people started abusing it via excessive usage and Google chose to no longer offer that free service (as opposed to e.g. spend their resource on never-ending battle of policing abusers).
That is very much their right.