Hmmm, as far as I'm aware the storage space was already 2 or 3 GB with Automattic (who run wordpress.com) ; I've been using them for years and Always been very satisfied. I've mainly posted text-only articles so the storage is something I never paid too much attention to.
The Gmail reference doesn't surprise me. Before Gmail, mailbox storage of 2 MB (Hotmail) to 6 MB (Yahoo) was the norm. It was Gmail who changed that completely and thereby motivated/forced other providers to switch to larger storage too.
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