Why not? I've got a 128GB phone, so I have the space for all those. And I absolutely LOVE the idea that I have access to any photo at any time. Granted, I don't have the full version downloaded on 99.9% of them. The full versions on in the cloud and on my Mac.
I should also mention, I'm quite anal about tagging stuff. So it's not just a giant lump of media sitting on my device, it's actually searchable and such. If it was nothing more than a giant lump of media, I can imagine it might be too much to browse through to find stuff. But I'm smarter than that. It typically takes only seconds to find the photo I'm interested in.
Just to add some context, my "Photos & Camera" is currently using 9.35GB (keep in mind I only have thumbnails downloaded for most of these) on my phone. That's 372 videos and 27,729 photos.
Edit: I just read the second part of your post. I don't think we're talking about the same thing. I do use iCloud and even pay extra for that feature. So I don't think you were referring to people like me with your comment. But I said it, so I'll let it stand.