Even if that was the case, why not let users decide for themselves if they wanted 32GB and 8 hours of battery? 8 hours of battery is still pretty awesome.

I think the narrative that Apple presented about not giving the 32GB option because of battery time doesn't make much sense if you consider all the design decisions around these new machines. It makes more sense that Apple thought only a minority of users wanted 32GB and then it backfired.