I have an iPhone 5c which is sync'ed to my primary MacMini at home via iTunes.
When I upgraded to iOS 8, it didn't require anything remotely close to 4GB of free space on the phone. I did it through my computer, which requires far less space on the phone because it doesn't have to store the downloaded upgrade installer on the phone itself.
I am under the impression that the iPhone uses iTunes to do its music syncing, not only on OS X but on Windows also. So it's a reasonable assumption that nearly everyone with an iPhone also has a computer (OS X or Windows) with iTunes (it being free), and can do the same thing I did. So it should only be the remaining relatively few folks who don't have a computer, who need to do an in-place upgrade of their phone.
So why is this such a big -- in the sense of widespread -- problem? Sure it's a hassle for that small minority, I get that. But for everyone, such that it gets called "the most annoying issue"?
What am I missing?
M4L iPAD
You can upgrade either over-the-air with WIFI or upgrade with a hard wired cable connection to your computer. If you use the WIFI connection, the download has to have room for the download, the un-compressed files, and then the install working files, as well as space to recover in case there is an OOPS if the install fails. All of that takes space on the device. If you use your computer, you only need space for the install, a much smaller amount of usable space is required to do the job. There are actually a lot of iPhone users who don't have a computer and get their music over the air now.