John Gruber, "Note to Self: It's the Storage Space, Stupid":
If there is any way that Apple could have brought the base model storage up to 32 GB with the new iPhones, they should have. And it’s inexcusable that they’re still selling new devices with only 8 GB of storage. If this decision was made simply in the interest of profit margins, and/or to nudge would-be entry-level-model buyers to the more expensive 64 GB mid-range models, whatever money Apple is making from this is not worth it, in the long run, compared to the collective goodwill they’re losing and the frustration they’re creating. See also: this support doc from Apple, "Resolve Issues With An Over-the-Air iOS Update".