This. Always bought the largest iPod capacity available each time I bought due to my music collection. My first iPhone (iPhone 3G) was 16GB, then 32GB 4, then 64GB 5. All for music. Whilst it sounds extravagant just my Beatles collection (all UK albums in mono & stereo, US albums in mono & stereo, BBC vols 1&2, Anthology 1,2&3 etc) comes to 8GB. Add in several other artists with large back catalogues (Zepplin, Floyd, Maiden, Beach Boys etc) and punching past 64GB isn't hard.
Add to this a Spotify Premium subscription with local caching to preclude burning through my cellular data allowance and space quickly becomes a premium commodity.
Whilst I could carry on decanting music on and off a smaller phone is hardly the worst problem in the world, I've happily ponies up for a 128GB phone so I don't have to. Being able to take some or all of my carefully curated iTunes library with me + Spotify and listen to what I want wherever I am is a pleasure I never tire of.
As far as the recent keynote went, they had me at 128GB. In fact they could have kept the 5:5s form factor, kept every other feature the same and I'd have happily bought one. All in all a small price to pay for the sheer love of music.