First; it's "they're" as in THEY ARE, not "their". If you're going to call me stupid, at least get your grammar right.
Second; this is Apple... it's like YOU'RE new to how they have run THEIR business for decades. If you don't like how they practice business, take it elsewhere. You have Google and Microsoft to buy products from if you don't like how Apple does it.
Third; as many have stated, my wife being one of them, not everyone needs more than 16gb. That and they are pushing their cloud services.
How is it that you are so ignorant to the matter that other people's needs are not the same as yours? The "cheapskates" are the ones that cry and complain that Apple is "screwing them over", they're not screwing you over, they're here to sell you a product, not give you what you want for the minimal amount of money you're willing to shell out. You are welcome to NOT buy their 16gb phone cause it's "under spec'd" or buy their 64gb and 128gb option for 100-200 bucks more. It's pretty simple. Just because you and I know the cost to build a device doesn't mean they have to set the market to our knowledge. If it wasn't selling at that tier, then they wouldn't build it at that Spec. /economics-101-lesson.