Who says there has to be huge sales numbers to keep something going? As long as it's still selling and still profitable, it means there are still users who want it, and that adds to the ecosystem. E.g. Apple's wifi router, there's simply no need to kill it, and it makes those few users super happy, and keeps them in the ecosystem. Force them to look elsewhere, and you've just created the thin edge of the wedge for your competitors.
The beauty of the iPod Mini is it's super small size, and yet still has usable controls. It's a completely different use case to the Touch. I use my Mini as a complement to my phone, not as an alternative. I use it when I want a small, lightweight, portable music/podcast player, and don't need/want my phone.