Storage is $15/TB/Month. Commodity hard drives currently go for around $17/TB.
Considering data is replicated across several hard drives, servers and electricity aren’t free, etc. I would guess that Cloudflare won’t break even on storage until several months of utilization (unlike Amazon who probably breaks even on day 1).
I guess in the long term the product will at least pay for itself, in the short term it will just be a marketing campaign and gives people a good reason to switch from their Amazon stack in case they don't depend on things like EC2-S3 transfers. When comparing to Backblaze B2 [1], Cloudflare's storage cost is 3x but you don't pay for egress as a tradeoff (compared to 0.01$/GB for Backblaze).
Egress pricing 100 times lower than Amazon could be realistic (S3 egress costs between $50/TB and $90/TB, while Hetzner bills 1 EUR/TB, and Cloudflare is bigger than Hetzner).
Free egrees is weird. In particular using R2 to offer videos or other big downloads appears to be unrealistically cheap.
A $1/TB offer would still be very appealing, while allowing Cloudflare to break even on traffic-heavy use-cases.
Considering data is replicated across several hard drives, servers and electricity aren’t free, etc. I would guess that Cloudflare won’t break even on storage until several months of utilization (unlike Amazon who probably breaks even on day 1).