I understand why 16GB wouldn't be enough but for my own use, 2 gig is probably enough - as I've used hardly anything on the iPad.
On a tablet, I only do web stuff and read PDF files (it has to be PDF as they are all web design/developer related manuals). So, I admit, my tablet use is really like a glorified eReader. I even bought a kobo Touch eReader to see if I could use that instead of the iPad but, obviously, it's a bit rubbish for web browsing and PDF books.
But, yeah, if you are watching lots of vids and need a catalogue of MP3s then I see why you'd need lots of gig.
Not that anyone is asking, but I think we're lacking a decent large format eReader. Kindle sized devices are okay for portability but try reading a manual on one with lots of illustrations, charts, etc. They are totally rubbish. I'd love an e-Ink device with a screen as large as an iPad (or larger), colour isn't required - just long battery life, nice crisp text and, let's go for it, a double screen so it's like a proper book. (Someone has got to make such a device eventually - until then, I don't think we are anywhere near having a proper electronic book.)