I see what you did there..... >.>
Yay, someone noticed
And all this talk about Moore's/Kryder's Law, they are all related and have proven to be more or less consistent with the developments in those fields even up to now.
True, we will reach some limit of storage density, but we're assuming that Apple won't redesign the innards of the iPhone to free up more space for things like RAM and storage. We're also assuming that this limit will catch up to Apple's yearly doubling of storage space with their iPhone/Touch devices, in the near future. This shouldn't be the case for at least several years. Who knows, we might not even need that much local storage, maybe storage will grow so fast that it wouldn't make sense to have 1TB of storage on a phone.
Who knows, but 1TB would be nice to replace an Apple TV.