[Throwaway23412]

You think that the average consumer has no videos, games, or music on their phone? (And we forgetting photos and various other types of apps.)

You sound like when data plan providers say "Our average customer doesn't use that much data." Of course they don't. They try to stay within the ridiculous limits providers give them.

iOS 9 alone takes up a few GBs. The only reason the 16 GB option is the base option is because it anchors the price of iPhones. iPhones have an absurdly large profit margin, and price anchoring just provides the average consumer a psychological "out".