Because they need the space?
There are people who want the highest quality photos on their phone, lots of offline music, or gasp, they maintain their own music library and don’t use streaming services. Same goes for video.
There’s lots of reasons to get more space, even more if you plan to keep the phone for a few years. Apps, and games in particular are going to grow in size, as time rolls on, to take advantage of the extra power and graphical capabilities of newer devices.
Even I’ve gone up a notch to 256GB, I’ve not yet maxed out my 64GB, but I’m bloody close now, where I wasn’t two years ago.
And I’m thinking I’ll try and keep the new phone for a couple of years again. I think one of the big changes (other than cameras and all of the usual stuff) next year will be 5G, and it’ll be years yet before that reaches me, so I’m not fussed for it yet.