My thought process went like this:
I have 200GB of iCloud Drive storage now, I can use iCloud Photo Library, and I use iTunes Match + Spotify for my music needs. Those are the two big storage uses that I think I and most others see on their devices (pictures/videos and music). I also have an unlimited plan, so utilizing cloud services isn't going to cost me an arm and a leg.
That being said, I could get by with 16GB. But what about that random vacation where I'm not connected to any networks to upload my pictures and videos? What about a special occasion (kid's birthday, weddings, etc.) where I need to record 1080p video for an extended period of time? That's GBs of space! What about plane rides where I want to load up some 1080p movies now that the iPhone 6 has a 1080p screen?
So, could I get by day-to-day with 16GB of space? Probably, and it wouldn't take a ton of management. But what about the unplanned times when I could use some extra space? Is $100 worth it for the peace of mind? For me: yes.