I've read many of the derogatory comments in this thread around Apple releasing an 8 GB iPhone. These are misguided, IMHO. Purchasers, more often than not, fall into one of two buckets: "Got to have it all" or "low price". The 16 GB 5c didn't fall into either of these and I think that's why sales were well below Apple's initial expectations. Frankly, I'm surprised it's taken Apple this long to recognize this and adjust.
For reference -- I have an 8 GB 4s for work (waiting on that bigger screen!) and still have over 2 GB free.