64GB will not go away. And yes it has to do with pricing. If it was much cheaper, it would have been more popular.
In all instances prior to the Galaxy S6 the larger capacity devices were difficult to find depending what country you were from and they were very expensive. They were also never available on launch, including the Galaxy S6 (128GB arrived a few weeks later)
Most end users are not interested in storage or sdcards and networks know this, which is why they will mostly or only stock the smaller versions.
The Galaxy S6 Edge demand was high despite the silly pricing, pricing is not the issue and neither is the sdcard slot, if there is an option users will mostly go for the cheaper option.
They don't care about storage, internal or the sdcard.
And no, 32GB is plenty of storage for most people if the option of sd slot is available. The rest is used for bulk storage where the high performance of ufs2 is pointless. Class 10+ sd performance is plenty for even 4k recording.
For the average user even 16GB is enough, that's the problem, they always buy the cheaper device because they don't understand the issues they will have later on.
Fast read/write speeds are not a waste, apps, games and Android itself loads a lot faster.
Installing an sdcard and using it as internal will be notability slower, what's the average 128GB microsd card offering in terms of write speeds? about 30mb/s with 80mb/s read? That's not comparable to what UFS2 and Apples solutions are offering.