Okay, two things you're talking about here. First, making the phone thinner. With a 5.7" screen phone, I do think being thin helps a lot. Compare holding a Nexus 6 and an iPhone 6+ (which is virtually identical in size to the 6P). The 6+ is much more comfortable to hold partially thanks to the thinness of the device. It also fits in pockets better, and on top of that while power users don't care about thinness, much of the general public does.
That being said, the 6P has a huge battery! 3450mH is massive; only the Z5 Premium, the Mate 7, and the ZenPhone Max have bigger batteries.
As for the second point, I agree that 16GB to 32GB is not much difference in cost. It's definitely calculated as a way to make some margins and not cut into the flagship phone. And I agree that many people end up hitting their storage limits with simply photos and videos, so 16GB is tight. But then we get to question who is this phone for?
Decisions that are made the same way marketing companies make them. To make more money.
Now first and foremost Google is a company and companies have to make more money. It's not just marketing companies. The Nexus program is not a charity, so they do have to try and make some money off of it, even if they cut the margins razor thin.
Really, the whole idea of Nexus is to be a developer's device, one that app creators can use as a benchmark for Android phones; if it runs on a Nexus, it runs well on a relatively pure version of AOSP.
If we think of it that way, big storage doesn't really make much sense. If you're doing hardcore development you probably don't want your tinker phone to be your daily driver (source: family of engineers and tinkerers, am a tinkerer myself, many friends and co-workers also) because you know stuff could get messed up. So the storage isn't that big of a deal.
These phones aren't made to perfectly fit Android enthusiast wants/needs. If they did do that, the price would no longer match, and us enthusiasts would complain again.
Hence, every generation has had concessions. GNex had that awful battery and quickly-outdated SoC, Nexus 4 had no LTE, Nexus 5...actually I think the Nexus 5 was beautiful and perfect in my eyes but I know the camera isn't very good, Nexus 6 had a dull screen and a way-too-high pricetag, 5X is only-current on RAM with no wireless charging, 6P misses the charging and no OIS.
But I mean in the end, think of it this way: If not a single manufacturer is making the perfect phone, what is it that you are actually looking for?