Seeking Alpha writes:
"Firstly there is the business model of the hard drive manufacturers. They compete mainly not on price, but on disk size instead. They are constantly driving up the capacity of their drives (by 40% a year compound) using technology whilst trying to keep prices constant. So the cheapest drive to buy is the one they are currently making most of. This will usually be cheaper than a smaller capacity drive.
Just now top end hard drives for home and office PCs are one terabyte (1,000 GB) with 4 terabytes on the way, so they have left the Xbox 360 way behind. Interestingly, a quick price search shows that 250 GB drives are currently cheaper than 120 GB drives. And as for the 20GB drive that Microsoft use in the Premium, in this industry that is pretty much a fossil. So it isn't even going to cost money to give us bigger hard drives"