16GB iPads are a poor (or at least mediocre) user experience, even for ordinary users. It's contrary to Apple's ethos to continue making them at all.
It's even sillier when you consider that everything else about the baseline $499 model has been drastically improved several times over since 2010, and Apple has taken steps that clearly reduced the utility of the 16GB baseline (retina graphics, full HD video).
32GB should be the new $499 baseline. It's way past time.