It depends what you need. I have a 16GB iPad and it's more than enough. I've had it for over a year, and there is still 10.8GB of space left. I sync everything to my iPad, too. For an iPhone, I will not be syncing everything - I will be picking and choosing what to put on it, so 16GB is more than enough. I could probably make do with 8GB.
Like I said, it all depends how much stuff you want to have on your device. For me, I mainly use Safari, Mail, maybe one or two extra apps such as Angry Birds, and about 100 songs from the iTunes store. Other people have a lot more stuff, so they will need the 32GB. I think 64GB for a phone is very impressive, but I definitely would not need that much space.
I have a 1TB iMac that I bought in 2009 as my primary computer, and I still have 976.75GB available. I really wish it was only 500GB, because I really don't know what I'm going to do with all that space!