Google Picasa retired on 1st May, 2016. The background was set and it was the next logical step allowing Google to focus entirely on one photo service - Google Photos which was there for one year and saw widespread user adoption. Picasa was a desktop application allowing to edit and manage photos. You could upload photos to Picasa Web Albums to store and share them online. Google Photos, on the other hand, was completely online i.e. cloud-based with no offline desktop application like Picasa. With the world moving to cloud and mobile, it was a decision to keep up with the times.
Google had developed Google Photos as part of Google+ and it was one of the best features of its social media platform. Though Google+ had very powerful features, it didn't have the user adoption of Facebook. So Google spinned Photos out of Google+ in May, 2015 to allow users to use Photos without any need of signing up for Google+.
I have used my another Google account to demonstrate this setting since my original account showed Google Photos storage as 0 GB (I had selected 'High-quality'). But here, it was set to Original by default and I never changed it. I can change it now to 'High quality' for future uploads. Additionally Google has added feature to 'Recover Storage' which converts the existing photos and videos to the High-quality limits thus freeing up space. When you click on Recover Storage, it will display the message: Compressing photos and videos to high quality. This process is time-consuming and the actual time taken depends on the size of your photos and videos collection. When it completes, you can again check your total storage and it will be: