I don't think it is unreasonable for them to shut off access to the data after x days. What I don't agree with is the deletion after y days where x << y does not hold.
Or implement the deletion policy like a LRU cache would. Have a fixed size storage for customers who haven't paid and just delete the image of the oldest customer in storage when the disk fills up. Send emails to the oldest 10 customers in that disk that if they don't respond, their data will be deleted.
yes, I like having some time between shutting it off and deleting the data as something of a last-ditch contact effort... It's just if that time is long, the expense needs to be paid for some how.