"But if you actually watch that ticker it's increasing so slowly that it probably isn't costing them any more money"
Multiply the increase by the amount of users that receive it and the number doesn't seem so small - and can never be considered 'no cost'. The trade off is that with the more mail they can index per user, the more relevant advertisements they can display and the more people they can lure with their gimmick. Of course, they're also taking advantage of the 10% rule when it comes to offering that large amount of storage.
Agreed. Storing more email helps to target their ads, and most users will never use the full amount of space. Also, at the rate that storage gets cheaper they are able to continually increase the limits. It's like the problem that Amazon had with excess servers, they had so much infrastructure that they needed something else to do with it, to fix the problem they started the EC2 and S3 programs. Gmail could serve the same kind of purpose for Google.
Multiply the increase by the amount of users that receive it and the number doesn't seem so small - and can never be considered 'no cost'. The trade off is that with the more mail they can index per user, the more relevant advertisements they can display and the more people they can lure with their gimmick. Of course, they're also taking advantage of the 10% rule when it comes to offering that large amount of storage.