And in most cases where you can chose between 32 GB and 128 GB for the same model you have to pay $50 to $100 for the additional 96 GB... why should it be any different for a Switch revision with 128 GB internal flash memory?
It is much cheaper to buy a 128 - 200 GB microSD-card instead. The difference in loading times between playing from internal memory, microSD and cartridge is also neglible on Switch.
The Switch is already more expensive than a PS4 Slim or Xbox One S, the price gap would only widen with "switching" to 128 GB internal flash memory for the entry model.
They already adapted: microSDXC compatibility up to (for now theoretical) 2 TB
You also don't have to decide in advance how much storage you need years ahead (and most of that storage remains free the first year) while paying todays prices for it, you just buy additional storage when you need it / when bigger cards got cheaper.
You can start with a small and cheap microSD card (I'm currently using a 64 GB card which was laying around from other devices, otherwise 32 GB would still suffice for this year) and later just copy the data to a bigger microSD card.
It is a pretty easy process to transfer and/or backup the data on the microSD card: http://en-americas-support.nintendo.com/app/answers/detail/a_id/27595/session/L2F2LzEvdGltZS8xNTI2OTA0MDI1L3NpZC9mVWEzdXkzdkR5S2JZQTlFemwybUJ2WjljYWt5aWxGTExzYnRqbDFNN2w4RGNycTdTSUJnNkpZenpXcDFwQTVTRW8lN0VKU1ZzaTg0Q1ZTTFVjUzE5eFhEanB5d1NPQlhveTVjdWFuYzFPdk16WllvM0RZV3F0MlZpUSUyMSUyMQ%3D%3D
I'm sort of a tech head, so I can use the tech just fine, that's not my point. My point is that 32GB internal storage is tiny in a product aimed at a market where the digital products easily take up 10GB and up towards even 40 and 50GB, and that basic functionality should be a minimal demand to satisfy in a gaming console. It just so happens that basic functionality today includes the option of digital copies out of the box, without the need to go out and resort to 3rd party solutions. It doesn't matter if consumers are forced to either buy more storage right away because the internal drive is tiny, or if they're forced to pay more for games due to developers/publishers being forced to take certain measures to make it work from a technical standpoint; it's an unreasonable and unfair assumption that the end user take this cost.