Just expanding on what Art said,
Say company X is offering 300GB space and 6TB Bandwidth for $5 a month - they dont expect you to use that much space (chances are you will never) so they thinkthey can oversell.
If all the clients on the server actually used up 300GB Space and 6TB bandwidth, unless the hosting provider had a HUGE HUGE NAS and a huge bandwidth allowence from their carriers, they would run into a hell of a lot of problems.
What i may do sometime is get one opf these huge cheap accounts from one of the providers and actually attempt to fill up 300GB space - if i get shell access to be able to create directories and copy them and download files using wget or ftp it should not be a problem.
If i do do this i will let you know how i get on