You could buy a 900$ laptop with a better CPU than any laptop out there. 20 hours battery life (almost 3x any other laptop out there). Silent (no fans). With a great screen, a great keyboard, lightweight, well built, etc.
Basically a machine that was more than 2x cheaper of competing laptops at 2500 $ or more, yet had more than 2x of everything.
I wish I could get back all the time I've wasted helping relatives deal with their Photos libraries and backups just because they got the entry level machine with skimpy storage...
As for storage, yeah 240gb is probably not ideal for most people but since I bought the air mostly as a lightweight device I can carry anywhere instead of a workstation (even though it's insanely powerful for what it is) it does not really matter in my case.
(This is my first Mac so I was very worried of the pretty limited ram since I had no idea how macOS deals with memory, but if it's fine for me I'd say it's fine for most normal/casual users)
The small SSD is the bigger issue. If you use it as your main machine you will fill it up quickly and people then start doing stupid things like putting their Photos library on a USB stick or on an SD card, and that's just asking for trouble.
Keep your daily driver lean and cheap (and easy to replace).
Maybe 240GB are enough for light usage if you store photos in the cloud. I can only say that in my experience 1TB is the bare minimum if I don't want to spend half my time copying files around.
"Optimize Storage" is a bandaid that helps make your Mac with too little storage usable. But it's not a great solution. You'll be looking at spinners a lot. It's just not a nice experience when every video you want to look at takes a few minutes to load.
It was a fantastic product launch sure but it's not really fair to say it was 2x better on all metrics at a given price.