Sure, if you don't use WiFi. I have a few apps that are over 300MB on my phone, so it's not uncommon for me to hit over 2GB in just updates a month. But I'm on the 200MB plan, and barely use over 100MB.
Don't people use iTunes on their PC/Mac to get stuff on their phone though?
I agree, 20MB could perhaps be 200MB, but then the people on the 1GB could be in for a nasty surprise when they update an app and it costs them $15 or something. I think that's the risk in raising the limit, is that you'll end up having so many people go over their limit (so then, that begs the question why doesn't AT&T do it and rake in the $$$ in overages?). I guess their network still needs some work.
I think if people want an app bad enough, they'll get it through their computer, it's hard to keep a 960x640 resolution app with high quality assets below 20MB, high res 2D artwork can be pretty large.
All the 20MB limit does imo is force app maker to use lower quality assets, or in some cases they have no choice but to ignore it, like Cave's SHUMPs, no way they'd get in under 20MBs.