I agree that overselling is bad, and companies should just straight up say, "Your max is x," but man, it's much worse to be stuck in a host that tells you you have 50MB disk space than psuedo-infinity (that's a fun term...).
My dad knew someone through something or other who does webdesign/hosting, and I'm terrible at design, so we decided to hire him to design/host the site. His design fee was reasonable (on the edge of over priced in my opinion, since it looks a little dated. Not like 90s dated. Just 2-3 years dated), but man does his hosting plan suck. Suck is actually too good of word for that.
The features, as follow:
-25MB Storage Space
-1 POP3 E-mail Box
-E-mail Forwarding Addresses
-Online Account Management
-24/7 FTP Site Access
-E-mail Support
All for the low price of...
$20/month. Seriously. (We actually ended up with 50MB for $23ish/month, I think because when I talked to him on the phone, I was looking in cpanel, and was like "25 megabytes?" in a really weird tone. lol.)
I'll take over sellers over 25MB anyday.
But, if I genuinely wanted unlimited, I would be quite disappointed when my account was suspended for violating the host's ToS.
"I'll give you x, but you can only use y at a time. Deal?"