Good point, I had forgotten about the ProRes and ProRaw formats offered for better quality post processing of content taken with the iPhone. I only use the iPhone for casual photography since I have dedicated cameras for high quality photographs and videos (Sony in the main, A7RV and A7IV with a decent range of lenses).
The iPhone does a fair job of taking photographs and making videos for casual use, but I am a semi professional and so when I doing work for 3rd parties I use my other equipment. So, agreed if you are using the iPhone to take photographs in ProRaw and video in ProRes you would indeed need 1 to 2 TB of storage, such as yourself. I would venture to suggest that most users are probably not doing this and simply using their iPhone to take casual pictures and videos of their current activities and require fully processed photos and videos out of the phone for immediate consumption. Then 512 GB or less is more than adequate.