I could. Regular phone + iPod touch or iPod classic or small tablet.
I think the fact that the iPhone has everything packed in there makes it more exciting than the iPod Touch. I remember getting the current-gen iPod Touch right when it came out and returning it a week later because I got bored of it (not only that, the lack of an IPS display was killing me). I ended up buying an iPad after that.
For me, if I'm going to get an iPod Touch, an iPhone is the way to go to have everything in there.
The whole reason I never got an iPhone is because I didn't want to pay for the high monthly price (of any smartphone), and that I wasn't a person who "upgrades" (meaning I'd be paying a monthly price for something I wouldn't upgrade - or maybe in the future, I'd have to upgrade to make the monthly price worth it [which I didn't want to do]), so I bought a consumer camera and an iPod Shuffle to supplement the lack of an iPod Touch or iPhone.
I now regret not buying an iPhone because it seems like the way to go for an all-in-one item.
Now I have an old flip phone, an iPod Shuffle, and a consumer camera to carry around when traveling, when I could get away with just an iPhone. Also, the iPhone has these advantages:
1.) It has a choose-your-song interface like other iOS devices. I currently only have that interface on the iPad, which I can't bring everywhere.
2.) The iPhone has the standard dock that most speakers and cars use. I only have an iPod Shuffle with a headphone jack for all portable music playing.
The iPad has its own niche, but I would probably sell it (and the Shuffle and camera) to get an iPhone if the family didn't use it so much!