Fundamentally XL for them extends their ability to continue to rip people off on what they charge for storage, a very lucrative business for Apple. Helps that little 128gb go a bit further.
But most of us work around this with a $2.99/mth iCloud+ subscription which gets us 200GB storage on the cloud. Not a deal but a trivial enough cost to not worry about running out of storage.
As a non pro user, this is perfectly ok for storing all of my 33k photos since 2007.
I pay 99 cents/month for a well integrated system that has never lost my data.
What alternatives provide that convenient service?
Yes, I could buy a giant HD. No I do not want to run a backup service.