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For $50 less, you can get an iPod with ten times the capacity.

I don't think that the iPod Classic and iPod touch are designed to cater to the same market. The Classic is for the people who still like the click wheel, and have a massive library of music. The iPod touch is seemingly designed to cater to the market that wants a multifuction device, which is seen in the fact that it has Safari and Youtube.
 
I strongly suggest people stop treating iPod touch as a traditional iPod, A.K.A. a music/video player.

Yeah, stupid me. Of course iPods aren't meant to be used for music and videos...



No matter how you spin it, ten times the capacity for a cheaper price is a major deterrent (7 episodes of Lost and 1600 songs alone are 11GB on my 5.5G iPod)
 
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