Why spend an extra $50 and still not have enough space on your smartphone when it comes with Google's cloud?
When you visit Google's Nexus 4 page and click on the "Shop now" link, it takes you straight to the 8GB version. (Go straight from the Play Store and you get 16GB. Go figure.) There's a reason for this, they want you to see you can buy the smartphone with the best specs available for (a whole dollar) under $300. That puts the Nexus 4 squarely into the impulse buy realm, and serves as a notice to other people selling phones for a whole lot more. It's $400 dollars cheaper than the closest competitor, and that means something.
For some folks, 16GB or more internal storage means wasted space, and wasted money we could use for something else. I've used my Galaxy Nexus every day since I got the thing, and still have over 11GB of the original 13.3GB free. That's 11GB of space I had to pay for, and will never use. T-Mobile offers fully unlimited HSPA+ 42 plans, and even gives you a price break when you don't subsidize a phone, so I'll never run out of data, even if I'm not at home using Wifi. I wish the Galaxy Nexus had been offered in an 8GB model at a lower price. Yes, I said it.
I have thousands and thousands of pictures and video in Dropbox and Google+, 125 days straight worth of music in Google Music, and endless Hollywood entertainment from Netflix, HBO Go, Xfinity Player, and Google Movies and TV. There is no way I could fit all of this onto any device. Having it in the cloud also means I have it on every Android device I own, including oddballs like the Nexus Q and Google TV. It's a win-win for me, because if I had to depend solely on physical storage on the device itself I would lose most of the media I have. Since I'm forced to use the cloud anyway, I'll pocket an extra $50. One day we'll see smartphones with terabytes of storage, but until then I have to use the cloud. I know I'm not the only one. You're still going to need the cloud if you have a lot of media, there is no way around it.
I guess I could give Google the extra $50, and still not have enough storage, but instead I'll use it to pay for next month's service, or a trip to the movies with my wife. There's a case to be made for buying the 8GB version, and I fit that case. I'm glad Google is giving me the option. Sure, a 16GB version for $50 more is still a good bargain, but I can think of much better ways to spend that money versus giving it to Google.