NO! they cheaped out with the Touch version.]
Well, the iPod touch 4G costs most than the 2nd gen model so, it sure ain't cheap.
"Retina" display is resolution only - it is not the same screen as the iPhone it's not IPS.
It IS the same display - there's no way Apple would have two completely different screens manufactured, that's absolutely ridiculous to think otherwise.
Appears to have a rear mike only which is going to be a problem while holding it and speaking at the front for FaceTime.
I'll bet it's a non-issue as mics these days are extremely sensitive at picking up ambient sounds omnidirectionally - just as long as you don't "hold it that way" meaning you hold it in some manner where you put a fingertip or something over the mic hole completely blocking it.
Back camera is cheap .7M (VGA) and only works decently as a movie camera.
Because that's what it is - who the hell would dream of doing "pro level photography" with any camera in any portable device like phones or PMPs these days anyway? It works, it's useful, end of story.
No GPS which is a badly needed feature in a portable device.
That's what the iPhone is for.
No 3G connectivity which was rumored but dropped
Never was 3G connectivity ever considered for the iPod touch, it's ridiculous to think otherwise. That's what the iPhone is for. Think of it this way: if Apple would give everyone 99% of the functionality of the iPhone for over half the cost (meaning that 1% would be the cell phone circuit itself), they'd be shooting themselves in the foot.
Back material is the old and hated instant scratch polished stainless steel
That's what cases are for. Anyone spending that much money on such a device and not putting SOME KIND OF CASE ON IT even a plain simple Latex "skin" of some kind on it is a complete nutcase and their opinions should simply be dismissed as blabbering.