I agree. My 3G only has 16GB. And to be honest, I still have more than 70% free memory. And I have tons of itunes files in it! I don't know what they will be using all that memory for!
This is the most storage space so far for the iPhone, but as time progresses, I wouldn't be surprised to see the storage space increase. Remember when computers only had 40 MB hard drives? Look a them now.
Yeah, I don't really get the point of having such big space. I got this toshiba player for like $400 and it had 60GB, I only used max 2GB. I guess if you are really into music or videos the 32GB for 3G S is the thing for you.