I think they should phase out 16gb on their flagship devices. The base "HTC One" that I bought in May came with a minimum of 32gb. (Though perhaps the OS and Sense take up so much space that 16gb would be a bad experience).
I know few people who got a 16gb iPhone 4S that don't wish they had more space and aren't planning on getting a 32gb 5s. No, they're not loading music onto their phones even. Mostly it's that they don't really have any means of offloading their photos and video (don't own a computer), their phone is their primary camera, so they frequently run into space issues between a handful of decent size apps and photos and video.
Now, if Apple changed how photostream worked (so that it stored all photos and not just the last 30 days or 1000 or whatever it is) and allowed video upload as well, it would solve this problem and 16gb might be fine. I just don't think it's enough right now for someone who doesn't have a computer and isn't tech savvy enough to figure out other means of getting their photos into the cloud.