1) Because typical user behavior for email will require megs, not gigs. I've used apps for my business for five years running and only barely crest a gig.

2) Because Gmail's main economic contribution to Google isn't the advertising, it is in signing people up for Google accounts, just like Yahoo Mail's main purpose is to stickily draw people to the Yahoo front page. After you're logged in on Google, your rate of searching goes up, compared to otherwise demographically similar people who are not logged in. (Same if you use Chrome or the Google toolbar, by the way.) Google likes when you search because Google is a multinational advertising company and about two thirds of their inventory by revenues is on their own search result pages.

3) Separately from the totally rational reasons to prefer Gmail (a strategically important service with negligible marginal costs) over Picasa (a strategically marginal service with relatively high marginal costs), Google is also a big multinational corporation, and internal politics still happen there. There is a political angle to any project getting additional resources. Picasa is not politically favored compared to, I don't know, that I-can't-believe-its-not-Facebook that they launched recently.

Just because it's more profitable for them, doesn't make it right to users. Many people would like the flexibility of managing the extra space Google says we have in our Gmail account, so why not put people over profits for once and do what's best for users?

Google does provide you with more flexibility of storage allocation once you purchase additional storage. At that point all services share the same quota and you get full flexibility.

As such, see this split in case of unpaid accounts as another incentive for people to upgrade. As you don't pay anything, it's well within Google's right to optimize their offering to keep their costs as low as possible (ie. limiting picasa storage) and get the maximum marketing value (i.e practically unlimited mail storage).

They have the right to offer anything they want, but ignoring users who want more control over their supposed Gmail space just isn't putting the user first, it's putting profits first. But I guess greed isn't evil, right?

You can complain about resource limitations on a free offering from a publicly traded company if you'd like. Or, if you'd like to be treated like an actual customer, you can become one, by paying for storage.

Oh yea, I forgot we only exist if we pull out our damn wallet in this corrupt capitalist society.

Didn't you answer your own question? They know most gmail users won't use more than 1GB so it's good for marketing to offer 8GB and financially they won't waste too much money as most people won't use those 8GB. With picasa however, that limit would probably be reached quickly by most or many so it's safer for them to offer less there.

If you pay for space upgrades then that applies to all services. I'm fairly sure the Gmail space system was related to how they stored the data, as they have the always increasing ticker. Either that or it is/was a marketing ploy.

For reference, here is the Google storage pricing: http://support.google.com/picasa/bin/answer.py?hl=en&ans...

Photos less than 2048x2048 in dimensions don't count towards the free limit since Google+ launched. I have always resized my photos to 1600px wide, and now my Picasa usage is very low.

I think your use case is not universal. I regularly reach 80% - 90% and so do my peers. We have to regularly use findbigmail and smart-personally-defined filters to delete big and unnecessary mails.

Gmail is used as a collaboration as well as backup tool by at least a few of us. What it means is that we often tend to many attachments exceeding 10MB - and multiple versions of them. Not the most optimal usage I know, but it is very quick and convenient most users (even the not-so-technically proficient ones) are able to use it with ease.

Google can index and search your emails in GMail, and serve you ad. The more free storage the more emails to index. Pictures are difficult to parse and index. It's less a profit center for them.

Wow! This comment prompted me to check how much of my gmail storage I am using, and it made me realize that my google account through Cornell gives me 25GB of storage. Oh how I wish I could use this 25GB as cloud storage.

http://i.imgur.com/ixlZ6.png

Your anonymization process pairs ineffectiveness with labor-intensity astonishingly well.

What information about me were you able to glean about me?

meaning that several names are still visible or deducible, and you had to manually draw each of those dozens of lines.

Aside from the other reasons mentioned here, email compresses fairly well so 8GB of email could end up using less disk than 1GB of photos (which are already compressed).

Images can't really be compressed while emails easily can. That Even if you reached 8GB of text that isn't how much storage you're taking up on their servers.

In addition, if you store more than 1 GB, chances are that a good fraction of that is photos emailed to multiple people, which they can store only one copy of while counting this storage against each person that leaves it on their account.

There are other costs you need to consider such as data transfer, the usage patterns of your private inbox is different from a public album.