If Apple charged cost + small margin on everything, we wouldn't be having this conversation. They don't though. Looking at my iPhone, iPad, and Mac, I have close to 15GB of apps. Some free, some paid, some IAP. Apple hosts all of those, and certainly doesn't charge me nor the developer based on cost of hosting them. Some of that is subsidized by the high-priced apps paying a 30% cut to Apple, some of that is subsidized by the high cost of my devices. Cloud storage, especially for photos, should be similar. In theory, more iCloud storage would translate to more people paying for premium apps that use iCloud, and more iDevices sold.