This storage theft (for those who have no intention of upgrading) really does show the arrogance of Apple.
Anyway, I found hints on the Apple forum on how to get rid of that 3Gb file (thanks go to SergZak)
https://discussions.apple.com/thread/5385718?start=0&tstart=0
My steps differ slightly and I've outlined them below (Please note, some familiarity with using Terminal and the File System on OSX is required).
1. Put iPhone in Airplane mode
2. Connect iPhone to Laptop/PC and start iTunes
3. Backup iPhone data to iTunes
(NOTE: I take no responsibility for loss of data beyond this step. It's your responsibility to ensure all your IMPORTANT data is correctly backed up. The next step wipes your phone, almost like a factory reset, but doesn't do any firmware update).
4. On iPhone, in Settings App, select General->Reset->"Erase All Content and Settings".
5. Your phone will reboot/restart.
6. Upon getting the unlock prompt, unlock your phone and do following *immediately*
7. Put your phone into Airplane mode!
the device appears to start downloading the iOS7 update. Aaaargggh.
8. Go into Settings->Usage. Take note of the Photos & Camera usage.
9. Create a 5 minute movie with the Camera App on the iPhone. This creates a file in size 400-500MB. Take a look at Settings->Usage->Photos & Camera. You should notice an increase.
10. Import the movie with iPhoto.
11. Select your imported movie, and choose the pop-up menu option "Show File" to locate the movie in Finder (file system). Take a copy of the file.
Code:
sh-user$ cp IMG_701.MOV StubRoot.MOV
12. Make several copies of the file (here I made twenty)
Code:
sh-user$ for index in 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20; do cp StubRoot.MOV StubMovie${index}.MOV; done
(note: you can do steps 11 and 12 manually by using the Finder instead of Terminal. It just takes a little longer)
13. Import all the files into iTunes (you'll be wasting some laptop diskspace but that's a small sacrifice compared to stuffing your 8/16Gb iPhone).
14. Copy as many movie files as required to your iPhone, in order to fill up the storage. Leave no more than 1GB available. The iOS7 installer requires at least 2.9Gb.
15. Turn off Airplane mode.
That's it. When you go to General->Software Update, you'll see a complaint about the update cannot be downloaded because of insufficient space. Yeah. Whatever.
On a 16GB iPhone, my usage hovers between 9 and 12Gb (13Gb is the max space available), so no, i don't want to lose 3Gb unnecessarily. There is the inconvenience of micro-managing your storage space (I was almost unable to install TomTom 1.5Gb because of that unwanted iOS7 file), but at least I now get to use the space I want to.
I hope the steps above can help others reclaim their precious space.