Actually, here is something people don't understand...
One, is people don't know computer terms in general, or the fact that Kilobytes is 1024 bytes, and a megabyte is 1024 kilobytes as the OP originally posted. The fact that number originates also due to being a Base 2 calculation. The problem is, most people use Base 10, decimal. And most people only understand base 10. Remember, data is stored in bits, so data is done in base 2 versus base 10.
Second, the file system also eats up some disk space, which also makes people twitch for a second after it gets formatted. Depending on the type of File system and the size of how the partitions are made up and file system allocation will also affect how much disk space you actually get out of the hard drive.