After Apple released the original iPad in 2010, it tested a second-generation model that only had 8GB of storage. AppleDemoYT, known for sourcing rare prototype devices, recently shared a video featuring the test iPad.
The iPad runs SwitchBoard, Apple's internal factory testing software, instead of a version of iOS. It was manufactured in 2011, but it is a 2012 iPad that has an iPad 2,4 identifier. The iPad is a prototype that Apple used during the Engineering Validation Testing phase of device production.
On the back of the iPad, there's an 8GB label, which suggests it wasn't just meant to be a test device. Apple's original iPad started with 16GB of storage, and Apple never released an iPad that had less storage space than that.
Prior to the launch of the iPad 3, there were rumors suggesting that Apple would release a low-cost iPad 2 with 8GB storage. It was supposedly going to be a more affordable option, but Apple ended up launching the iPad 3 at $499, while keeping the 16GB iPad 2 around at $399. The 8GB iPad never made it to market.
The rumor about the 8GB iPad came from DigiTimes, a site that has a hit or miss record when it comes to Apple rumors. Interestingly, the iPad 2 prototype proves that this is one time that DigiTimes wasn't wrong, because Apple did seemingly consider an 8GB model.
It's likely that Apple decided 8GB wasn't enough storage space for a tablet, and 2012 was around the time that Apple phased out 8GB capacities for the iPhone. From the original iPhone to the iPhone 4s, 8GB storage was an option, but the 2012 iPhone 5 started with 16GB of storage.
These days, 128GB is the minimum storage that Apple offers in its iPhones and iPads.