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Because people still buy them. It's that simple.

For a parent buying for a smaller kid, a business/organization buying for its employees, or a senior citizen who just runs a few apps, it's ok.

It's obviously not for people wanting to record videos in 4K (or record videos in general -- lots of older people only record a few minutes or so a year, some grandchild's birthday or such).

If you do that a lot, you get a higher end model.

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I disagree.

If entry level were 32 GB, many people would buy that.

However, anyone who's owned an iPhone before knows that 16 GB is far too little to hold even a small collection of songs, photos, apps, etc. By removing the 32 GB model and making entry level 16 GB, they cause most of us to bump up to the 64 GB instead --> $$$.

I have what I'd call a considerable, varied and growing collection of apps, plus many albums and a full photostream on 16GB. I only run out of space when I have a lot of photos at the same time as a silently downloaded update. Both are easily solved within 10 minutes.

Maybe also because they can sell space on their colo'd hardware at a big premium.

Not so sure about that. iCloud is negligible to their profits -- whereas people not being satisfied with their iPhones can have huge impact.

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