deis-database backup not working in new Azure installation causing DB to not work at all

[jalberto]

Followed the start guide then:

• az storage account create -n $SA_NAME -l $DC_LOCATION -g $RG_NAME --sku Premium_LRS
• helm install deis/workflow --namespace=deis --set controller.k8s_api_verify_tls=false,global.storage=azure,azure.accountname=$SA_NAME,azure.accountkey=$SA_KEY,azure.registry_container=registry,azure.database_container=database,azure.builder_container=builder

after 20mins deis-controller is restarting, checking logs says it cannot connect to deis-database, db logs say:

server started
Performing an initial backup...
wal_e.main   INFO     MSG: starting WAL-E
        DETAIL: The subcommand is "backup-push".
        STRUCTURED: time=2017-01-10T20:22:33.294209-00 pid=106
wal_e.worker.upload INFO     MSG: begin archiving a file
        DETAIL: Uploading "pg_xlog/000000010000000000000001" to "wabs://database/wal_005/000000010000000000000001.lzo".
        STRUCTURED: time=2017-01-10T20:22:34.201929-00 pid=120 action=push-wal key=wabs://database/wal_005/000000010000000000000001.lzo prefix= seg=000000010000000000000001 state=begin
Traceback (most recent call last):
  File "/usr/local/lib/python3.5/dist-packages/azure/storage/storageclient.py", line 171, in _perform_request
    resp = self._filter(request)
  File "/usr/local/lib/python3.5/dist-packages/azure/storage/storageclient.py", line 160, in _perform_request_worker
    return self._httpclient.perform_request(request)
  File "/usr/local/lib/python3.5/dist-packages/azure/storage/_http/httpclient.py", line 223, in perform_request
    raise HTTPError(status, message, respheaders, respbody)
azure.storage._http.HTTPError: Block blobs are not supported.