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.