They use the size of the alphabet (256^1024 different characters) to argue how much data a single character (1 KiB) contains. A single character still can only

They use the size of the alphabet (256^1024 different characters) to argue how much data a single character (1 KiB) contains. A single character still can only encode 8096 atoms. There are 2^8 things you can do with a byte. But you can't do them all at once with a single byte.