that would be a valid point, but in fact they had taken away yahoo photos, because yahoo was changing from that to flickr, so nothing was added new for free, just replaced 1 for 1.
Which is basically them removing a service they gave to all when they signed up. Now their 1:1 swap is 1 subtracting 1 and back to a loss. So yes, now they can drop the price of their service, since we will get less for our buck or business can go elsewhere.