Maybe I'm crazy but I don't think Apple will loose much if anything by killing 16 gig size and going for 32 for starters.
Honestly more space equals more room for apps, music, movies, etc and gives the consumer a better value and more avenues for Apple to generate micro sales. Considering that the competition has storage options via micro sd , the idea of limiting phone to small storage is just frustrating to the consumer, makes negative buzz and guarantees less potential app or music sales so it's a loose loose and Apple needs to get off it's high horse and see the bigger picture. People don't see iphone as a value anymore because you can buy android phones with similar features for a dramatically lower price.