Cost-wise, wasn't it was cheaper than adding an internal 2.5" drive because it used standard 3.5" drives (which were also faster)? So bang-for-buck, if you were looking at 120MB or above then this thing would save you a few quid.
Yes, it gave better value for "bigger capacity" (aherm) drives.
I wanted 540MB, which (iirc) was the biggest Overdrive available at the time and set me back about 50% more than my A1200 Desktop Dynamite pack had.
I actually only ever used about 300MB of it (mostly 8-bit audio samples) as I was still recording and mixing down to 4-track tape in those days, so I probably could have got away with a smaller internal drive but two things stopped me:
1. My A1200 was still under warranty and I was terrified of opening the case (hilariously absurd in hindsight).
2. I took on board the AF / CU mantra of the time: get the largest drive you can afford.
It was still a great purchase though. Swapping floppies every ten minutes (even with my extra FDD) became a thing of the past and I really did fall into the clichéd "how did I ever manage before this?" frame of mind.