But for the cost they are charging for the Nano, it SHOULD have more features. It's not the point of how much features you care to use, but the balance between price and features.
Forums ate my post. Ergo, TL;DR below.
You didn't create the device; therefore, you don't get to set the price. If you want to set your own price and demand specific features, then grab some investors and create your own.
There are plenty enough features to balance out the price. A smaller form factor comes at a price. So does an above average LCD with multi-touch capabilities. I'm sorry if it's not what you have demanded, but again, it's not your creation.
If you are so insistent on having "fluff" features like video recording, a camera, and the ability to make pancakes and fold your laundry ... why don't you simply get an iPod Touch?
You aren't understanding that the Nano isn't marketed to the crowd that needs everything above. It's apparently being marketed towards those looking for a fairly full-featured music player that is small and unobtrusive for active people. Why else would they have included a clip, a tiny form factor, a rotating screen, Nike+ integration, and a pedometer? I'm sorry that it doesn't have what you think it needs, but it just doesn't look like it was designed for what you'd be using it for.
$150-180 is way overprice for a music-only device.
Oh, and with this logic, the Classic should be discontinued too, right?
/facepalm