I guess it totally depends on your use case. When I had my M1 MacBook Air, and the three or four prior machines, they all had 256GB of storage on. That's what I'd consider the minimum.
Most of what I do is just surf, casual editing in Word, a bit of Photoshop whilst listening to music in Apple music and talking to people via Facebook Messenger or WhatsApp. I routinely had about 180GB free.
I do have an external Samsung 500GB T5 drive (and subsiquently two 1TB T7's on my Mac mini) - so if I did need extra space, lets say for video editing, I'd just plug that in. But as it's not often I do that, it was never a bother. For my current MacBook Pro, which I use as a media centre computer when we're on holiday in our camper van, I have another 500GB external SSD that houses our movies and tv shows library on. I have an Anker hub that it's plugged into, so when we want to watch something on our TV, via the MBP, I just plug in one cable which charges and connects to the hard drive.
What I would say is it is perfectly easy to get by on the base storage even with minimal amounts of effort being put into having to manage such a small amount of space.