May be YOU dont need that much space, but with us with very large music collections and apps. Plus movies and TV shows it would come in handy. Most arnt like you. Most dont want to choose and decide what to put on there. They want everything on at all times and not have to worry about "oh I'm going on a road trip and I really want the series finale of LOST, but I also want this movie.... urh" no.
I have a very large music collection, about 2TB of ripped movies/tv shows, as well as another 5K photos. I bought the 64GB thinking why sacrifice? I want it all with me as much as possible....right?
Not really. The fact of the matter is that 64GB is still very small compared to what I would want to put on it in order to have a 'complete' library of my stuff. We're a long way off in terms of flash storage to handle what I have, and mine is probably very small compared to many others.
So let's start with music. I put my whole collection on, and really found myself not listening to music much on my iPad. Maybe in the background is nice from time to time, but I'm usually watching a movie/TV show on the couch while I surf, and rarely dawns on me to crank up some music on the less than stellar speakers. This is iPod Touch territory 100% in terms of portability..why pay for the extra storage on an iPad and just buy an iPod Touch??
Let's go to movies. Like I said, I have 2TB's of ripped movies, which I'm never going to get all on the iPad anyway, so I will have to make a choice whether my iPad is the largest or smallest. Aside from that, there is always the 'Air Sharing HD' app that allows me to stream all of my movies from my PC, wifi, or if on the road, 3G. So, the only time that I can think of aside from that where I might need lots of entertaining movies, is a long >5 hour plane ride. In that case, surely I can pick 5 movies that will keep me entertained.
Finally, if we are talking about apps, they are so conveniently small, that you can fit quite a few without taking up too much space. I currently have about 100 apps, 10-15 of which I might use on a regular basis.
The moral of the story is that I sold my 64GB 3G ipad (for a profit actually), saved a couple hundred, and went with the 16GB 3G iPad. My eyes were bigger than my plate to speak initially, but to each his/her own.