Well, first off it's a device I use a lot everyday so the cost is justifiable as I will have it for 2 years.
Second; I will be due for an upgrade with my carrier so I will get a nice discount on any phone I purchase. So the pricing will most likely start at $199 on the low end new model from my carrier. I doubt Apple will have 4 storage options so we may only see a few hundred dollars difference.....which would put it at $399 for me. But if they do decide to go for four different storage sizes that would put it at $499 for me.
Third: I have the 64gb iPhone 5 so I'll unlock it and sell it (won't have a need for it any longer) and make maybe $200 or so.
Yes, $1,000 does seem high. But lots of people aren't buying unlocked and have iPhones they can get rid of afterwards to save some $$.
Right now I'm using 60/64gb's on my iPhone. I've had iPhones since the very first model. A 128gb model will be the first one that I can fit my ENTIRE music library on along with everything else. That's a big deal to me. Back when the iPod video came out I got the largest capacity and nearly had enough for my iTunes library at the time. But it has grown quite a bit since then. And I do not like carrying two devices around so I no longer use my iPod Touch. We used to carry cases of CD's around in our car. My wife and I dwindled it down with each having an iPod. Now the day may finally be here that we can just have all our music on our phones. It matters to us