You are absolutely correct they aren't scaling storage. As a business, they want you to use iCloud AND/OR get a bigger GB phone. Simple. They are a business, you can't fault them for that.
Of course I can't fault them for chasing profit, but I can fault them for chasing profit while encouraging users to make choices that are against their best interests.
There is a threat though that consumer unhappiness with their device's glaring lack of storage may lead to long term problems for Apple in 3 years from now.
It's short term gain for long term pain to the quality of the brand.
