The point I think is that Apple expects users to have many apps they use regularly - allowing each app to take up large amounts of space reduces the device's overall functionality.
Apps can also go over the 200MB limit by providing content 'packs' to Apple, which are downloaded on demand by your app, managed by the OS, and evicted for space when necessary.
Overall the point is to simultaneously allow as many apps to be installed as possible while requiring as little user administration as possible w.r.t. disk space.
One persistent problem on iOS is that some apps really abuse the caches directory by filling them and failing to provide some kind of cache purging functionality or logic. Users' devices get full, and policing disk usage by apps individually is a pain - both fundamentally and with the current UI. Superficially the OS has the right to purge the caches folder any time it wants, but in reality actually doing so regularly would break a large number of poorly engineered apps.
An off-the-shelf spinning-disk HDD is $50; an off-the-shelf 32GB USB stick (for a flash memory example) costs $15. It's not the size of the device, it's the cost structure and maintaining margins.
Apps can also go over the 200MB limit by providing content 'packs' to Apple, which are downloaded on demand by your app, managed by the OS, and evicted for space when necessary.
Overall the point is to simultaneously allow as many apps to be installed as possible while requiring as little user administration as possible w.r.t. disk space.
One persistent problem on iOS is that some apps really abuse the caches directory by filling them and failing to provide some kind of cache purging functionality or logic. Users' devices get full, and policing disk usage by apps individually is a pain - both fundamentally and with the current UI. Superficially the OS has the right to purge the caches folder any time it wants, but in reality actually doing so regularly would break a large number of poorly engineered apps.