The manufacturing cost difference from 16GB to 32GB is unlikely to be more than $5-$10 at the most.

Apple seems to produce the 16GB version just so they can quote a lower price, but they expect people to naturally want more.

My old Android phone (the 1+1) had 64GB flash.
The newer Nexus 5x has only 32GB -- They also did the Apple thing and built one with less (a 16GB offering), but really?

Cheers!