'"Continuing to run an essential central server shouldn't depend for finance on continuing sales of new product - that's effectively a Ponzi scheme."
This is a difficult one. It sounds reasonable until you think "how else can a company do this?"'
SImple. You sell it as a paid-for service. I pay my ISP, my domain registrar/email provider and Usenet service providers monthly, annually or whatever. The latter two just provide the service but the ISP also provides the network interface kit which, in fact, remains their property. What's to stop an operation such as Revolv operating as a service and charging as such? The H/W could either be part of the service deal or a separate sale but making quite clear that the service needs to be paid for for it to keep working.
'Storage obviously isn't unlimited: it's limited by the total data storage in the world, for example. Any reasonable person knows that it cannot be truly unlimited. What it means is "don't worry about caps". If you go silly then you can be told off from the company, and eventually disconnected. Is this a better or worse way of going about business than explicitly stating caps?'
It is worse. If you say unlimited then that's the offer. As we both agree it's a nonsense so don't offer it because if you do and then try to apply caps later either you're in breach of contract or, if you snuck a limiting clause into the contract, you're guilty of false advertising.
'The idea is mostly to reassure people who have no real idea what a gigabyte is'
s/reassure/lie to/
People have no idea what a gigabyte are going to be the ones who have least idea of what the realities are.
The principle is very simple. Sell what you can supply. Don't mislead people into thinking that you can supply something you can't.