Have you ever compared the iPhone side-by-side with a screen with a modern resolution? It's a huge difference, on other phones you get a lot sharper text, pictures look sharper, you can fit more text on there that is still visible.
Have you noticed they also have bigger screens? Or OLED contributing to that? You also have an installed base issue. All the software is written for the 480x320 screen, scaled on the new screen it will actually look worse than on the lower resolution screen. Not terrible but certainly not better until you have native software.
I didn't buy an iPod touch because the screen was so freaking tiny. If they bring out a Touch with 960x640 in a 5" screen. Sign me up. That resolution in a 3.4" screen, zero interest.
No doubt that resolution will increase but quadrupling the pixel count for minimal benefit is very unlikely.