Everyone has his own view of what the perfect iPod is, which is why Apple keeps popping them out of the oven. The nice thing is that most of them aren't too hard to keep compatible "in advance" with later iOS, since they're relatively unsophisticated in their requirements. So they're that nice combination of fairly inexpensive, quite sturdy, quite useful.
I like the 6th and 7th gen nanos a lot. I didn't like the ones with the cameras and the curved side. Loved the 2nd, thought the 3rd was ok and I still use mine but I sort of make fun of it too, it seems awkward somehow. It was sort of a pause... enroute to iPod touch or something, even though the nano line didn't die out then and in fact seems still to be going strong.
Personally I feel that iPods make wonderful gifts. When I am given one, it means I don't have to reload some other model I already own, I can just put some newer music or video on the latest addition to my collection. I love grabbing an iPod and just taking it along for the ride when I go someplace I'm likely to have to wait for an appointment. Whatever's on it is my surprise of the day but with the advantage that I personally chose that content at some point and stashed it on that device.
If they made a Classic-dimensioned device but thinner, with ssd and a screen taking up most of the front the way the new nano does, it would sell like crazy even though it would lack the wheel of the classic. Yeah yeah i know it wouldn't be a "classic" at all, but it would still sell for people who are more into these portable devices for music and video, not so much other apps, not that you couldn't use it for those or at least whatever they stuck on there. Something with nano-like capability, radio etc. not many apps. I'd love a "mega nano" iPod!