Bull. iCloud cannot and will NEVER replace the ability to have tons of movies and TV shows on your devices. Capacities will continue to increase until the telecoms are shut down and companies whose job it is to actually improve our infrastructure are put in place.
Google was doing gigabit fiber to the home. Whatever became of that? I don't want Google doing it, I don't want Google owning the servers, I don't want Google involved. I want that fiber made and I want it laid. By other companies.
This needs done. There's no excuse for it not to be. When more than 30% of the country has even a QUARTER of a gigabit fiber to a home, I'll start agreeing with you, but by then portable Apple products will hold a terabyte.
I see no trend towards increasing internal capacity at the greatest possible rate. In fact, I was surprised that the legacy iPhones were released only in 8 gig models.
I think that the portable devices will have only moderately high capacities. I think that iCloud is a big part of Apple's plan to integrate devices.
I don't see a terabyte iPhone any time soon. People who prefer to have segregated, incomplete storage locally will become a minority, IMO, with Apple encouraging the transition in not-so-subtle ways.