The max size for Windows Azure drive is 1T
M$ only charged for the data in it, not for the size
My question is: why not just create an Azure Drive at size 1T
I have not yet found a lot of use for Azure Drives given some of the limitations that they have and the other storage options that are available, so I have only done some playing with them, not actually used one in a production environment.
With that said, based on my understanding, and the description you give in your question about only being charged for the amount of content stored on the drive I do not see any issue with creating a large drive initially and growing into it in the future.
Hope that helps some, even if it is just a - yes I think you understand it correctly!
I often do that when creating an Azure Drive: allocating a maximum size drive of 1TB. No discernable penalty. The only advantage to setting a smaller size: protecting yourself against cost overruns. There might be a possibility it takes longer to initialize a 1TB drive, but I haven't measured it.
The reason is pretty simple if you tried it. Namely, while you are not charged except for the data inside the drive, it does count against your quota limit. So, if every drive was 1TB, then you could create only 99 drives (think overhead here) before your storage account quota was gone. Also, yes, it does take longer to create a 1TB drive versus a smaller one (in practice).