Why?
With their massive market Apple can demand lower prices on components.
They currently sell iPods at pretty much the exact same price as their competitors (while making more profit) and the design and function are better! And if you look at the numbers of iPods and songs sold, it's clear that the majority of iPod owners don't use the iTunes store at all.
So why, exactly, would iPod sales change much at all?
Sorry how have you come to the conclusion about the figures that most ipod users dont buy from iTMS?
In my example i had a third party player and resented apple and iTMS as i couldn't play their music on it. I was forced to get an ipod even though i didnt want one. I made the decision though as i wanted to use iTMS. Remove the restriction and i will buy 'el cheapo' player elsewhere hence screwing apple income