Storage isn't really that much a true differentiating factor for low cost shared hosting. Mostly at this level you're seeing the difference between hosts that oversell and hosts that don't oversell. Even among the hosts that oversell, you'll see "marketing" differences depending on how much they'd like to oversell. BTW, it's not like they're advertising falsely because they will let you use your quota. It's just they depend on the fact that most people don't use it. I imagine they're like gmail in that regard in that Google doesn't actually reserve your 2 gigs of space for your email when you sign up.
What I've seen between the low-cost hosts ($7-$10 a month) and the ultra-low-cost hosts ($3-$5 a month) are restrictions on the number of domains and subdomains and also varied hosting features like php, one-click installs, Ruby, and shell access. Most ultra-low-cost hosts seem to use those plans as loss leaders and try to upsell you into one of their regular ($7-$10) plans.
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