Aren't they paying for storage and traffic independent of the availability of the service? So if 100,000 people uploaded 15 GB of encrypted backups to a free Gdrive, they pay for ~1.5 Petabyte of storage and traffic. I mean it's probably not significant for Google but it should cause at least a little costs without bringing any value (as long as you upload encrypted or bullshit data).

The main downside I see would be the negative impact on the environment. My example above would lead to plenty of additional hard drives and electricity that's just wasted for nothing.