It won't be difficult to make money if they don't try to be clever. They can display ad just like Twitpic on the their website. They can have storage limit.
According to the op he found the site via a phishing email. So likely it was just a mass mailing to hotmail accounts, or designed to look like it came from the hotmail team - naturally only Hotmail users would be worried about an email them.
I'm curious too. If they had a big list and broke it up into pieces to put on different computers, it wouldn't make sense to organize it by email provider. That makes it easier to get caught if all the hotmail access comes from one computer instead of spread around.
Maybe a seller split up a master list that way. "I'll sell you 50k hotmail accounts".
Most likely the phisher had a Hotmail-specific method to hit inbox, so their spam was more effective on Hotmail than other providers. The other possibility is that the phishing page emulated a Hotmail login, so only those with Hotmail accounts would believe it enough to enter their info.
I think hotmail has serious security flaws. I get almost weekly emails from hotmail user whose account has been spammed. I warn them, they change password (they make it more difficult) and sometimes they hack their account again!! It's unbelievable.
