I don't think RemoteJoy is a replacement for a smaller screen.  Ignoring the fact that it requires a not-as-portable computer, it's somewhat more laggy than playing natively.
Personally, I like bigger screens, though I guess some others like smaller ones.

16GB is enough IMO - I'm on 8GB, but I like the flexibility of replaceable memory.  So if your flash dies (too many write cycles) you can easily replace it.  You can also transfer stuff without the PSP being physically connected to the computer too, by taking out the memory stick (eg paused in a game).  Memory sticks really aren't that expensive these days.
Plus, the Go has no replaceable battery, and proprietary everything (can't use standard USB cable, TV out cable, are the headphones standard?).

The only advantages I see in the Go is smaller form factor (if that's important to you), internal memory (personally prefer external) and no UMD drive.  Maybe the game savestate feature too.