You're not, not by a long shot; and however we shouldn't assume the OP does either. They specifically wanted a larger on board storage options. I'm not sure what the cost is, but the device it's based on did come in LTE versions, 32GB versions and versions with SD Cards, so my assumption is they took the cheapest of those options, but I have no idea how they selected which one they wanted from what LG presented. It may have been as simple as Google saying, "It's going to cost $349" and LG said, "here's the best you can do for that price point".
You're 100% right in that it'd be cool if they had higher internal storage because it gives people more options. But I have to disagree that it's a mistake not to include it, unless that mistake translates into boycotting by a massive part of the base. The numbers seem to be telling them that 16GB is enough for most people. Of the 3 options listed above, I would have opted for a 32GB version, then LTE then an SD card (assuming I couldn't wish for a CDMA version), I'm sure you're order on those wishlist items would be different.
IIRC the cost to them for increased storage size is around $12 per device (16 is $12 more than 8, 32 is $12 more than 16, etc). That's from a breakdown of Apple component costs from a couple years ago, comparing the $12 to the $100 more they charge for nothing except for that change.