The Nano is definitely not dead.
It's the perfect iPod for gym, running etc. Speaking of the 6th gen that is.
You can't connect an
Watch up to a treadmill, crosstrainer etc.
Shuffle doesn't support Nike+.
iPod Nano 8 needs to either have a clip added to it or return to the 6th gen form factor.
But the Nano definitely still has a market.
If the iPod Touch were to disappear as well, as mentioned in other posts, then the only iPod left would be the Shuffle. Thus the "iPod" as we've come to know and love all these years would be reduced down to nothing more than a 2gb, jog wheel based, clip on device.
I can't imagine there being just the iPhone and an iPod Shuffle.