Very well put! I had the exact same reaction as you: even though I don't even use 1TB/month, I found myself looking at alternatives simply b/c of the cognitive jolt of seeing the 20x reduction. Sometimes I wonder if companies don't consider the psychological impact of changes enough. No, logically, this change means a meager price increase for me, but if it caused me (and at least one other) to think about competing offerings, then like you said, indicates a marketing screwup.
That's not to say they have to keep offering that much traffic if they're losing money (of course they don't), but the way you make changes matters.
That's not to say they have to keep offering that much traffic if they're losing money (of course they don't), but the way you make changes matters.