I applaud you. I would have done the same until they added the "convert higher bit rate to 128" option to the iPhone. Now, I can have 5200 songs on my iPhone 32GB, which is roughly half my iTunes library, with enough space for app, photos, and video. I see no reason to carry around two devices when one does everything I need, plus all the guilty pleasures of the web.
Try squeezing 26,000 songs on your iPhone.