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Pokemonbrawlvg said:
Reggie on internal memory:

“You can plug in a full-on three terabyte hard drive if you want. I’ll love you as a digital consumer. The reason we did it that way is that the cost of that type of storage memory is plummeting. What we didn’t want to do is tie a profit model to something that’s gonna rapidly decline over time. We’ll let the consumer buy as much as they want, as cheaply as they want.”
http://nintendoeverything.com/index.php/98891/reggie-on-lack-of-larger-internal-memory-tivo-and-dvr-hardware-not-built-in/

And also not having to release new sku's just for HDD changes.