Nick Bilton makes the argument that the higher-quality, larger file size, iTunes Match MP3s was a move by Apple to sell larger capacity devices. Meaning that most users will be pushed towards a 32GB phone over a 16GB phone so that they can hold the same amount of music. I hadn’t thought about it in this way, but I think he is wrong.
I think most consumers are cheap asses.
Cheap asses tend to see spots where they can save money, and iTunes Match does just that, by allowing them to get all their music at anytime, from the cloud. Meaning you don’t need extra storage because you can swap out music on the fly at any time you want.
If the rumored streaming does come to the service then I think the argument is furthered that most consumers don’t need a larger capacity device. Personally, I decide storage size based not on what I want to keep on my device, but on how much I can add to the device through downloads, recording video and taking photos.