You're looking at it the wrong way. At the moment, both the Core and Premium are 'expensive'. Obviously, to the consumers shopping for expensive toys in the >$299 price range, the Premium is the better buy. No argument there, and naturally the Premium is the top seller.
This isn't the point, however. The Core SKU exists for the day where the overall price reduction has come so far as to make the Core a 'cheap' toy in the mind of the masses while the Premium is till an expensive one. This potential market is vastly bigger less discriminable. Even though cheapass late adopter enthusiasts can still argue (with merit) that a future $219 Premium is a better deal than the $129 Core (prices are guesstimates pulled from my ass), the number of customers for which the former purchase is not an option while the latter one is will more than make up for it.
Until the time comes when the Core SKU turns 'cheap' though, it will always be the ugly stepchild of the family, since MS probably couldn't have waited to introduce a storage-less SKU at a later date due to game compatibility issues.