I seriously doubt you went a full year without a single 3rd party app download (free or otherwise). I think you're lying.

If you did, it was completely unnecessary. The average iOS app is around 25MB. A 16GB iPhone has around 12GB of free space after the OS so, in theory, you could download easily download around 400-500 third party apps before you run out of room. Of course you have to manage this in relation to other media like photos/music but to think you had to forgo app downloads because 12GB wasn't enough storage space for ANY is the height of ridiculousness.

Normal people don't behave like you. Your response to a 16GB iPhone is nonsensical. The fact that you apparently don't buy apps unless you have more than 12GB of free storage space is not something Apple needs to worry about for their entire consumer base.

If this was a big phenomenon Apple would have discovered the complete lack of app purchases in the 16GB iPhone analytics and they would have determined if the lack of $0.99 app purchases was a bigger detriment than the benefit they get from encouraging $100 upgrades to larger storage options. Since they haven't decided to make the change it's doubtful the phenomenon is happening with any regularity that would matter.

I don't know why you think we care what you would do "if you had a say". The point being made is that doing things the way you want is worse for business. Also, what does any of our discussion have to do with thicker devices and bigger batteries?

What are you talking about in terms of an old phone being re-sold as an entry level phone? Also, what makes you think that frustrates poor customers? Again, if negatives outweigh the benefits in this issue it's doubtful Apple would be doing the thing you are referring to.