As mentioned, most of the packages will be required to update anyway from the repo. No need to install outdated stuff. I suppose 64meg would be enough.
Those that doesn't have a internet connection could of course be wanting a gigaimage with "everything". I don't see that this should be a priority for canonical though.
What I've noticed with other repos (centos) which have several different sizes of images, is that a default install from CD+internet update is different from one from DVD+internet update. When you tell the repo administrators they don't believe you. When you prove it, they don't know why it's different, because they doesn't have their things in order or any tools to verify such things.