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They wouldn't update the Touch (a pocket-sized computer) because they bought Beats (an accessories and music business)...?

You're going to have to elaborate.
 
i think the opposite. the beats purchase tells me they have big plans for the iPod line, to give it new life. i bet apple will redesign the iPods with lots of input from the beats guys, then include beats headphones with iPods. probably incorporate beats streaming player with or without a subscription option too
 
They didn't update the iPod Touch because the consumer demand isn't there anymore and it's a low margin product.

To hit the price points they need to move iPod Touches Apple has to cut margins considerably, they're basically iPhones without the cellular radio but they sell for hundreds of dollars less (than the full retail prices of iPhones).

The Beats connection is interesting though. Something new that includes flash storage and syncs with an iTunes account or can store music from a user's iPhone for offline or phoneless playback would be intriguing.
 
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