Unfortunately, because of shortsightedness from both Google and HTC (HTC mostly), phones back then only had like 450 MB internal storage, and from that only 250 MB were for the OS itself.

This means an ICS install would be severely limited by the hardware (I think a full ICS install is significantly bigger). Modders might be able to put ICS on it by cutting apps and features, or doing other kinds of hacks to extend the internal storage, but for Google that just wasn't worth it.

I would really blame HTC for this. Pretty much all of their phones throughout 2010 were like that. It was my main frustration with HTC at the time, another one being the weak Adreno 200 GPU.

Is it HTC or Google's responsibility to provide future-proof reference designs and specs?

HTC

"Future Proofing" a phone is difficult, because a manufacture needs to overspec the phone whilst still keeping it at a reasonable price.

HTC is notorious for underspecing storage on their phones. Other manufactures do not have the same problem.

Considering only 1% of android phones are capable of running ICS, I gotta blame it on the OS designer, not a reference hardware manufacturer.

In this case it is Google's responsibility.

There are ICS builds you can install on an N1 if you are willing to repartition your NAND (the stock partition layout can't fit ICS). Look here:

http://forum.xda-developers.com/showthread.php?t=1411429