I do have some qualms about having "only" 16 GB -- which is what I have now on my 4 -- but I think that's based on how I used to use my iPhone/iPod in the past, when I loaded up my device with tons and tons of music/podcasts/audiobooks/video. I find I don't do that anymore. I did have 32 GB on my 3GS, but all I really did with it was hoard media I never listened to or watched.
Now I have iTunes Match, my music is all in the cloud. It's trivial to move media and apps on and off of my phone, so I only need to have on there what I'm actually using at any given time. I'm not that big into iPhone gaming, so I don't have a lot of huge apps taking up space. Storage just isn't as big a deal as it was a few years ago.
If the extra storage were less expensive, I'd probably go for it, but for me it's not offering enough value to justify the cost. I'd rather put that money towards AppleCare, or accessories, or -- as I'm suspecting will be the case -- a bigger data plan. LTE will -- or should, anyway -- make streaming so much faster that it will be nearly indistinguishable from locally stored media.