You clearly don't understand. For many people, having a small amount of music with them is fine because that's what they listen to. But then there are people like us, who have large collections and love having that music with us because we have music in our heads all the time. We get a bit of "song x" in our head and suddenly need to hear it. I grab my 160 and most likely it's there. If I had to live solely on what's on my Iphone, it would be like the old days where I had to carry dozens and dozens of CDs with me (and, yes, I DID do this - hundreds, in fact, in those big fat notebooks that you slid the discs into the sleeves.) And all this doesn't take into consideration the fact that many of us are "album people" - we listen to albums, not songs. Outside of very popular music, albums are far more satisfying than "just a bunch of songs" to many of us.
You can't just say that everyone needs to slim down their portable collections to what is necessary. It works for you and that's great. I wish it would work for me. I wish I could live with just my 16gb Iphone. It works great for me going to the grocery store, but it doesn't suffice for a day at work where I'm liable to pass through several completely, totally, wildly different moods and genres that I couldn't possibly have guessed when setting up the stuff I wanted on my Iphone earlier that day or the night before. That's why we are hurt seeing the 160, and even the 120gb Classic on the chopping block.