Firstly, I think you may have replied to the wrong person. I wasn't the one who mentioned the early diskettes point, I was just quoting it.
But that said, we aren't talking about sector sizes. Of course storage mediums are always going to use sector sizes of powers of two. What's being talked about here is the confusion in how to refer to the storage medium's total capacity.
> Of course storage mediums are always going to use sector sizes of powers of two.
Actually, that's not true.
As far as I know, IBM floppy disks always used power-of-2 sizes. The first read-write IBM floppy drives to ship to customers were part of the IBM 3740 Data Entry System (released 1973), designed as a replacement for punched cards. IBM's standard punched card format stored 80 bytes per a card, although some of their systems used a 96 byte format instead. 128 byte sectors was enough to fit either, plus some room for expansion. In their original use case, files were stored with one record/line/card per a disk sector.
However, unlike floppies, (most) IBM mainframe hard disks didn't use power-of-2 sectors. Instead, they supported variable sector sizes ("CKD" format) – when you created a file, it would be assigned one or more hard disk tracks, which then would be formatted with whatever sector size you wanted. In early systems, it was common to use 80 byte sectors, so you could store one punched card per a sector. You could even use variable length sectors, so successive sectors on the same track could be of different sizes.
There was a limit on how many bytes you could fit in a track - for an IBM 3390 mainframe hard disk (released 1989), the maximum track size is 56,664 bytes – not a power of two.
IBM mainframes historically used physical hard disks with special firmware that supported all these unusual features. Nowadays, however, they use industry standard SSDs and hard disks, with power of two sector sizes, but running special software on the SAN which makes it look like a busload of those legacy physical hard disks to the mainframe. And newer mainframe applications use a type of file (VSAM) which uses power-of-two sector sizes (512 bytes through 32KB, but 4KB is most common). So weird sector sizes is really only a thing for legacy apps (BSAM, BDAM, BPAM-sans-PDSE), and certain core system files which are stuck on that format due to backward compatibility requirements. But go back to the 1960s/1970s, non-power-of-2 sector sizes were totally mainstream on IBM mainframe hard disks.
And in that environment, 1000 bytes rather than 1024 bytes makes complete sense. However, file sizes were commonly given in allocation units of tracks/cylinders instead of bytes.