BS. They are trying to market this thing as a core gaming machine and they are not going to do that with that pitiful storage, keep cost down my ass, its an excuse. They can simply make another model with more storage if they wanted to. Unless you're barely going to use the damn thing, 8 gigs will fill up fast. The core gamer the guys and gals who buy games on a regular basis will fill that in no time. Yes there are SD cards but who wants to have to keep a bunch of them on hand?? Really?? How is that different from memory cards? We're supposed to be going forward not backward. I hated doing that for my PSP and i sure as hell would hate it even more for my HOME console.

However if it is possible to hook up an external HDD and use ALL the data from the WIi U to there (not that music and movie file crap that PS3 has) then that would be the best and disregard the last paragraph

That's about one game... this generation. Start saving for SD cards!

You're really sticking up to this? Game patches/mandatory installs on my PS3 take up over 30GB of HDD space. I have used up 150 of 250GB on my system (I have a 120GB system, upgraded to 250). That's between patches, DLC, videos, and games purchased over the store. Digital Distribution is the future! And you might complain about mandatory installs on PS3 games, but it improves loading times and IO performance incredibly. Wii U is gonna be another terrible disk thrashing system thanks to no installs. Especially now that it has to load high res textures.

It is my understanding that that is the case.

A next gen console with only 8GB internal memory? Laughable.

I wonder if they're going to implement some sort of cloud storage?

so just enough space for one of my movies then...

HDDs are currently the most expensive single component in any console being produced. 

While I'm not one to praise Nintendo's hardware for any other reasons than characteristic "Nintendo durability" and the company's ability to use mature, lower priced technology to create hardware that is greater than its sum of parts (at a profit), from a business perspective, going with internal flash memory standard is good business. 

NAND flash memory in low quanties is cheap. Minimum size HDDs are still pricey components. 8GB of NAND memory is well under $10. The lowest capacity HDD currently being produced costs many times more.  

As long as Nintendo allows for the use of any USB based external HDD (no mandatory proprietary specially formatted "Nintendo brand" HDDs) to expand storage for game downloads and the like, what it means is a lower standard price for the console without additional cost for budget minded consumers who in all likelihood already have a USB HDD. 

Installs will be an issue with developers though as the base 8GB internal memory essentially eliminates the practicality of mandatory installs. It will likely be the same issue developers had with the Xbox 360, and were forced to work around. 

Even so as I understand they are using a specialized proprietary Blu-ray disc (not Blu-ray, but blue laser technology) with the same capacity, so how much would need to be installed?

Well HDD never really get below about $40 per drive retail (NewEgg). What happens is you just get more space for the $40.