And that is the point. They are aiming the new Nano at a market that isn't going to be competing with their own products. They made it better for a certain thing that the iphone/touch can't compete with as well, something very small that stays out of the way. For a market that doesn't need a lot of functionality but needs a lot of easily taken with very little to take it (a pocket or less, like people who work out).
For a market that could use something of it as well as the Touch. Or has no need of the extra functionality.
You aren't that market. You'd be better served with a Touch/iPhone (notice the iphone kept you from buying the nano.. the nano didn't really give you anything better that you needed, in fact it did those things worse. So why are you complaining? You have the product that fits your need. Some of us want something that doesn't sit heavily in the pocket or even better just clips somewhere and is unnoticeable. And for those times we don't need all the functionality of a Touch/iPhone/5th gen Nano).
Anyone who complains about them missing the point of the Nano and yet says they wouldn't buy even the one they claim to like cause they already have a Touch/iPhone is the one who has missed the point themselves. The entire point of changing the nano to this is because otherwise it would be competing (and badly too as the Touch and iPhone would do video/video recording a whole lot better and have a better screen for watching it) with a product they already make. So they aimed it at a different market that doesn't need that extra functionality but does need something the Nano does do better than the Touch/iPhone, be small and out of the way.