How is it possible that Hetzner (and other unmetered hosting) are giving it out for free? If you max out the 1 Gbit for a month that's ~300 TB.
GCP and AWS would've charged you $30,000 for that!!! Are the cloud providers just not competing with each other on price? How has the price remained so high for so long?
That said, I've frequently seen parallels between razor + razor blades pricing and how AWS/GCP price compute vs bandwidth. Computing is cheap, by some measures, but almost all customers will egress that data somewhere and once you've done your computation, you'll pony up whatever prices they demand for letting that data "egress"
You mean the big three. Other cloud providers are certainly competing: Digital Ocean is $0.01/GB, Oracle Cloud $0.0085/GB, OVH and Scaleway are unmetered.
That said many apps can deal with more latency. Image sharing sites would care more about cost vs latency compared to a multiplayer game.
GCE introduced a tier of lower perf but cheaper network. Hopefully the trend continues.
AWS and GCP both have much more investment into their own backbone, plus higher quality transit providers.
Second answer, because nowhere near all of the customers will use all of the capacity all the time. Economics of ISP oversubscription.