Ah, a long time since I first signed up, maybe the prices have changed, maybe not, but either way you're getting a lot more storage with Gmail for the price.

But you're evaluating that in a vacuum. When J. Random User is evaluating a solution for his/her email, cost-per-storage-unit isn't usually the highest thing on list (or at least not the only thing).

I believe that the vast majority of email users want nothing but free webmail.