For protoss you have to make excellent use of Sentries to delay your enemy. If possible, try to split his army in two with Force Field(s) and take on that half by itself with your zealots, sentries, and stalkers. You won't be able to take him in a head-on fight as Marines/Marauders dominate your T1 units.

Use this delaying tactic to get a few Immortals as soon as possible and transition into Colossus with the range upgrade. The splash damage is very effective against the tightly clumped Bio Ball, while Immortals can take many hits from Siege Tanks. Use Blink Stalkers to get close to the tanks and focus them down. Note that once you have a few Colossi, your opponent will usually get a few vikings to counter them, but focus them down quickly with your stalkers.

Honestly, it is a very difficult thing to beat as Protoss if your opponent is of better or equal skill, especially since you have to tech to very expensive units just to counter his (mostly) T1 army. You'll just have to delay and outplay them and not make any mistakes, and make sure you are very proficient with your Force Field and Guardian Shield usage.

Another option is to go High Templars with Psionic Storm and Feedback on the Medivacs, but I rarely go this route as it is too gas-intensive and higher level Terran players will just use Ghosts which nullify High Templars with their EMP ability (Removes all energy and 100 shield points). Not to mention if your clump of High Templars goes within range of a Siege Tank you're dead meat.

Do you want to know how someone can lose or how he did lose?

Bly lost because he played very poorly: he did not build enough drones.

Take a moment to let that sink in, because its a very very big mistake and its the difference between a good Zerg player (like Fruit Seller) and a bad Zerg player (like Bly).

Instead of backing off after taking the Terran Natural, he continued to press in. He sends wave after wave of a consistently sized army. He does this because he's not building more drones so he cannot afford a larger army. By comparison Tarson's army gets larger and larger after every wave. He's able to continue to accumulate units because he has a fairly healthy economy. This is due in part to MULEs, but largely because Tarson built enough SCVs. Even after losing his Expo he still has as many workers as Bly does. Think about that for a second. He lose an entire base and all his workers in it and he still has more workers than his opponent.

This game could have easily been one that was featured on Day 9's Newbie Tuesday

I could point out a dozen mistakes that Bly made, but none of them matter nearly as much as his poor drone usage. Because of his lack of drones, his assault becomes almost an all in. So in response to your question How is it possible Zerg with biggest advantage can still loose to Terran? Bly didn't have a big advantage. He sacrificed his economy on a gamble and it didn't pay off.

But let's imagine another universe, where Tarson wasn't playing Bly but was playing against a better Zerg like IdrA; and let's assume IdrA made the same early push.

Now IdrA is sitting on 2 bases to Tarson's 1, but they have equal workers. So instead of continually pressing his advantage, IdrA decides to play like he always does: Macro. He sits back and takes a third base and powers drones. Tarson retakes his natural and now he's down 2 to 3 bases. Not a big advantage for IdrA, but remember a Zerg can make drones faster than a Terran, so it takes Tarson longer to saturate that 1 base than it does for IdrA to saturate his 3. Now IdrA has a huge economy and he goes Roach/Hydra (or these days he's favoring Muta/ling, but pretend).

Imagine that battle for a second... or don't, because it actually happened. IdrA knocked out Tarson in IEM, exactly like I described.

The smartest thing you can do in Starcraft if you are ahead is to get more ahead. Anyone who played seriously in Broodwars knows this because if you pressed like Bly did, you got destroyed 100% of the time. Now Starcraft 2 is still new so a lot of people feel like they can do crazy 2 base play, but if you look at the high end GSL matches you see less of that and more of people trying to get more ahead.

You also mentioned a quote talking about Marauders vs Banelings. Now I don't think that the relationship between these two units had anything to do with this loss, but let's talk about them for a second.

Banelings are a highly specialized unit. Their role is to act as Zerg splash damage on light units. By comparison the Marauder is a more generalized unit, designed to act as a Meat shield (much the way the Roach acts for the Zerg). So it makes sense that a Baneling doesn't function well against Marauders (as that's not their role), and it also makes sense that Marauders do a good job of preventing Banelings from striking other units (as that's their role).

I would hesitate to say that a unit is broken because its functioning in its role and another unit isn't functioning in something outside its role. But let's say you want a way to deal with MMM balls. Instead of sending it waves of Banelings on their own. Consider mixing in more Zerglings (Bly actually does this to large effect). Now let's vary our composition based on their unit mix. More Marines? More Banelings. More Marauders? More Zerglings. Can't find a good place to engage? Burrow/Drops/Fungal Growth/Wait and Flank.

Here is the key thing, none of this is any assessment of Banelings against Terran, but rather an assessment of the tactics used.