And 14.8GB of your apps, you don't use.
I've seen that argument a lot. "You don't need that much storage, blah blah stream, something something cloud"
A lot of music use is moving to live streaming, and that's fine, because audio is comparably tiny - 256 kbps or less, a few megs a song for a few minutes of use, which is easy for any connection to muster most days. So for a lot of people, they don't need to keep their music libraries on device. That's great. Then there's apps, photos, and videos. There is no "app streaming" to speak of--you either have the app or you don't, you can't live stream just the parts of the app you're using. Photos and videos still don't have a good integrated "streaming" solution on iPhone (iCloud photo stream is incomplete and doesn't save videos). Combine that with some particular quirks about running out of capacity on the device, and you have a pretty good case for a larger capacity.
Have you ever wanted to play something that you haven't played in a while, but oh shucks, seems you deleted it and you'll have to download it again. But wait, you remember that you skimped out and got the 16 gig phone, which is effectively 14 gigs, but really only 11 gigs, because if you try to install an app when there's only a few gigs free, it'll complain about not having enough space until you delete a few more. That, plus the inconvenience of the 100 MB download limit or the requirement to hang around at a wifi hotspot.
Have you ever taken a video umpteen years ago and wanted to go back and relive that memory, but oh shucks, seems it's stuck on your computer meanwhile you're on a boat or a plane (or are superman). Sure, you could pay the outrageous fees for an internet connection in the air/sea, and then fetch it through iClou...oh wait, you can't.
These are just a couple of the many reasons why I want a 128 gig iPhone. Sync ALL the things. Not just to hoard, but because you never know when and what you'll want to share with friends and family, and you don't want to delete those things just to make space for using it day to day.