Whereas my 2019 MBP will suffer incredibly when I start running out of memory (it literally becomes unusable and requires a hard reboot), the M1 will transparently start swapping, and I generally don't even notice.
Just the other day I noticed a python process was running slower than expected, and it was a bug in my Pandas code so I had allocated 85GB of memory. The rest of the system was operating normally - Chrome, VSCode, Music were all fine.
I regularly kick off a data pipeline process with 8x concurrency, even though each process uses between 4-6GB memory. It's probably inefficient in some way, but overall is still much faster than running at 2x concurrency (where everything would fit in memory and it wouldn't need to swap).
16GiB is insufficient for mobile? iPhone SE has 3GiB and 12 has 6GiB. That is less than half your M1 RAM. How much more does the emulator consume?
So not strictly necessary, but when you're used to it going back to having to work around the limitations is burdensome. People not having lots of ram seldom complain, but they don't know how much time they're wasting on an inefficient workflow.
If the next MBP16 lineup with M1 (M2?) supports 32+ GBs of RAM other vendors will have to step up their game, though.