Here's what I gather will happen. I read through their terms, which as those things go was pretty insincere.
Anyone can keep a free account with a data limit of 2GB. My most current data load was about 375 GB. They don't seem to be able to automatically upgrade you, but watch for any "confirmation of plan" slipperyness.
They also don't seem to have a clear deadline, but I've got to assume it will be very soon.
They will delete data to reduce it to the limit of your plan, in the case of a free account down to 2 GB. The argument is that yes you get to keep a small plan, but any excess data constitutes a violation by you (us) of the Terms. So if you don't want that to happen, get it off NOW.
There's no possibility of suing these guys. The Terms include a Waiver of Trial. That means arbitration, and unless you live in New York, that means travel and expenses.
And they've got good lawyers who have already figured this out.
Photobucket, if you are listening, it would do you a lot of positive PR to recognize that 75% of your users (the portion that you identify as free users who use your site for 3rd party posting, otherwise known as the non-paying leeches who are wrecking your business models) could be helped with some simple steps regarding how and when to take their marbles and go home. I see a little bit more of that on the site today, so i assume you are getting the message.