In this case, "unlimited" probably means "~1TB on average".
Lots of companies already offer several hundred GB of storage and sharing at the $20/mo price point, and there are backup services like Backblaze that offer "unlimited" backup space for $5/mo without going out of business. So the monthly fee is enough to cover the storage and bandwidth that most users are realistically ever going to use. And when you have a lot of users, the average is the only thing that matters. If you use 1PB, you're being subsidized, not by the company but by a thousand low-utilization users.
In addition, they're probably betting on the price of storage to go down roughly in proportion to the gradual increase of average utilization over time. Actually, this is a relatively safe bet. 6TB drives now occupy the price point that 4TB drives used to occupy, which in turn can now be had for what 2TB drives cost a few years ago. With SMR & HAMR on the horizon and with neat tricks like stuffing 7 platters in a single drive filled with helium, this trend is likely to continue for quite a while (unless the Thai factories get flooded again).
The reason why Backblaze's unlimited backups aren't as much of a problem for me, is I have no desire for more than about 12 Terabytes of backups. So, as long as Backblaze's definition of "Unlimited" is 12 terabytes or less (and, based on their performance with me the last couple years, they are) - we are good to go.
But, I'm pretty certain if I tried to backup a 200 TByte iSCSI array (which appears as a "local drive", and, is theoretically something that could be backed up by BackBlaze) - I'd find myself either throttled, or receiving a polite email from Backblaze suggesting I was using their service in a manner that was not intended.
That's the thing with unlimited services - if you ask enough times, they will always tell you what the actual number is - I just wish they would come out up front and share it.
Since there is no such thing as unlimited anything in this universe, it would be unreasonable to assume that "unlimited" is anything but an exaggeration.
Then we enter the same territory as any other case where technically incorrect claims are used in the media. Like GB vs. GiB, or "hacker" vs. "cracker", or "hashing" vs. "encryption", you name it. When we nerds complain about people who fail to make such distinctions, it makes no difference whatsoever and they'll just look at us funny. Because vagueness and exaggeration are integral features of natural language and it is we who are being anal retentive about it.
In common parlance, "unlimited" is just a shorthand for "we're going to give you a large amount that we believe will be more than enough for the vast majority of our users, and we're not going to set up a specific limit, but we reserve the right to put up a limit if you do something that anyone with common sense should realize is an abuse of our policies". This works just fine in a world where people actually use common sense. You instinctively know that backing up your 200TB iSCSI array would be an abuse of Backblaze's policy, just as you know that grabbing a hundred napkins at the local McDonald's every morning and using it for all your personal hygiene needs throughout the day would be an abuse of McD's napkins-are-free policy. As long as everyone only uses as many napkins they need to wipe the ketchup off their fingers, McD's can continue to offer free "unlimited" napkins.
Typically, the actual quality of service and quantity of available resources does not depend on whether or not the service advertises "unlimited" something. Rather, it depends on the quality and integrity of the people who provide the service. A typical EIG-owned web host with an "unlimited" plan will kick you out if you use 100GB of bandwidth. YouTube, on the other hand, will happily let your homemade full HD music video consume 10PB of bandwidth.
You've come to the crux of the matter - but I think this is a battle we can win.
I was recently in BC, Canada, and I was purchasing a SIM for data use, and was told that it was, "Unlimited for 3 days". When I asked them "How much is unlimited" - I expected to have to dance back and forth a bit before getting an answer, but the sales rep instantly said, "4 gigabytes."
I then noticed on the brochure that I got from them, that the plan clearly was listed as, "Unlimited data over three days up to 4 gigabytes"
I guess that could be considered winning half the battle.
Even better, though, is Singapore - where there is no concept of "Unlimited" with Singtel - word never appears anywhere. You purchase data packages with very clearly listed time and data amounts. And, if say, you want to use 100 GB - then you go purchase 14 GB for S$25, 4 times. Couldn't be more straightforward.
Lots of companies already offer several hundred GB of storage and sharing at the $20/mo price point, and there are backup services like Backblaze that offer "unlimited" backup space for $5/mo without going out of business. So the monthly fee is enough to cover the storage and bandwidth that most users are realistically ever going to use. And when you have a lot of users, the average is the only thing that matters. If you use 1PB, you're being subsidized, not by the company but by a thousand low-utilization users.
In addition, they're probably betting on the price of storage to go down roughly in proportion to the gradual increase of average utilization over time. Actually, this is a relatively safe bet. 6TB drives now occupy the price point that 4TB drives used to occupy, which in turn can now be had for what 2TB drives cost a few years ago. With SMR & HAMR on the horizon and with neat tricks like stuffing 7 platters in a single drive filled with helium, this trend is likely to continue for quite a while (unless the Thai factories get flooded again).