There's a simple reason why Apple keeps selling 16GB, even though everyone is asking for a 32GB: Profits.
If, hypothetically, there was a 32GB option, most people would be happy with that and the mix of sales between the 32GB, 64GB & 128GB variants would be quite heavily weighted towards the 32GB (and somewhat to the 64GB). However, with a 16GB option, the consumer is forced to rethink whether that is enough (when they probably know it isn't), and will be influenced to buy a 64GB rather (or a 128GB, since he/she is going big, might as well go as big as you can). This way, the mix of sales between 16GB, 64GB & 128GB will now be more weighted towards the 64GB & 128GB models, which means more money and more profits.
All Apple is doing is forcing the consumer to shift over to the higher priced 64GB & 128GB models, because after all, the 64GB offers 4x as much space for just an extra $100! To the AVERAGE consumer (who isn't very tech savvy nor very conscious of these things) that is a deal and a half