Seriously? 1) Not everyone has 30bgb of music. 2) not all of those who do, need to have it on their iPod AND their iPhone. If they don't have an MP3 player, they won't have gigs of music most likely.
Movies? 3.5gb is a uncompressed blur ray rip. That is unnecessary on an iPhone. I'm sure iphone movies are much smaller files. Once you watch one, delete it and upload another. It's not a deal breaker. The 4gb is an entry level phone, and as such, the 4gb would be more than fine. My current phone (will upgrade to the iphone when my contract expires) has a whopping 512mb and an SD card for the real 1 gig.
There is an audience for this, as I believe the 4gb did pretty well 😉