Providing internet services is expensive. In the case of image hosting sites, the provider has to pay for lots of storage arrays (an enterprise 500Tb SAN array is probably around $1m to buy, $10k pa support - yes you could go cheaper, but even with free services, you'll get brand damage if the service is unavailable, or loses data), networking, transit/peering, compute power, development, support and admin, datacentre costs including rental, power and cooling.
Obviously somebody somewhere has to pay these costs. If you are using PB purely to host pictures for use on other sites, they have no income stream from ads, so what other income streams have they got? They could analyse/sell your pictures, but MS tried a similar model and it didn't work. They could put an ad on each image, but that model most likely wouldn't get the revenue from the ad providers, as the ad provider cannot prove its been displayed, as the ad model is all click-thrus.
$400 is probably based on them believing around 10% will take it up, as $40pa sounds about right for <500Gb online storage cost price.