Perhaps not so silly...
No, it wouldn't work for somebody that wants to listen to it right-then-and-there, but...it sure would make a great gift.
Especially if one's been away from home/family for more than a week...
Or if a birthday or event is coming-up and one didn't have time to pick-up a gift while traveling...
For those that travel a lot, a $30 premium wouldn't be so bad if it makes the difference between missing an event, etc.
And I'm not talking about "buying-off" one's family due to business travel - sometimes people just either A) don't have time to pick something out for friends/family or B) want to bring a nice gift home. Either of the preceding is an impulse buy, which this vending machine neatly addresses.
No, it's not the best value and if one plans better/has more time, then an iPod vending machine makes no sense. On the other hand, if one hasn't planned/didn't have time on a trip to pick-up a gift, then...