In Europe the maximum volume output of portable audio players is limited to 100db. I don't think there is a limit in the US, although there have been complaints against Apple and Ipods back in 2006, to which Apple responded by then releasing a new firmware that limited the volume output of iPods.
That's actually why there used to be programs such as GoPod, which enabled EU users to disable and get rid of that limit (luckily for EU users, it was just a software limit, not a hardware one). Unfortunately, GoPod development has been discontinued and as far as I can remember there's no way to do that on the Touch yet.