The 16GB is the cheapest option for a very fashionable phone. So no doubt it's popular. My wife has the 16 and I have the 32, figuring we'd never max out the memory in either case. Boy, were we wrong. She can't update more than a few apps at a time. I'm down to the last few GBs and even after purging videos and photos. Music isn't even a problem because we have iTunes Match so it purges things regularly.
The size of the retina apps is just insane. I compiled my first app (a small music app) around the time the 3GS came out and it was only 1MB. Now, even a simple game clocks in at 30MB.