Backblaze is operating at their own economy of scale with dedicated deals with suppliers, custom bare bones hardware, optimized processes, etc. It's always more expensive starting out as a little company for raw hardware and processes until you're big enough and mature enough to get the deals and processes in place.
That is also not the only service that Backblaze offers and wasn't their first. It could be that B2 is simply a way for them to offset their cost for extra capacity and are running it effectively near-cost for them.
If all their other customers on the $5/month unlimited backup plan store less than 1TB, but since it’s really aggressive about backing up everything (no, please don’t back up my steam games) on your computer I think they go over that.
They can't deduplicate properly encrypted data, that will have to happen client-side. So while they can deduplicate your data (if you have a copy of a picture in multiple places or maybe even a game installed on multiple machines), it won't work across users.
That is also not the only service that Backblaze offers and wasn't their first. It could be that B2 is simply a way for them to offset their cost for extra capacity and are running it effectively near-cost for them.