I own an LTE Mifi and can tell you that without a doubt LTE is not overrated. The speeds are great, I get around 10mbps in the Dallas area.
I see you have been rated down four times. Your post must be very offensive to some people.
Now seriously, I think LTE coverage is not enough to justify adding it to the iPhone at this point. On the other hand, in the recent patent auction Apple laid its hands on tons of LTE related patents, so they are definitely interested. On yet another hand, some article on theregister claimed that while LTE gives more maximum bandwidth to a single user, it doesn't actually provide much more total bandwidth in an area covered, which would make it less useful when fully adopted and more sensitive to bandwidth hogs. (I don't know whether this is true).
Apple sold 20 million iPhones last quarter... at over $600 each.
During that same time Apple only sold 8 million iPods at a much lower price (and no clue how it was divided among iPod Touch, Nano, etc)
Why would Apple make a bigger iPod Touch... now?
The target market for iPod Touch is "people with a bit of spare cash willing to spend it on a gadget". Within that target market, 20 million bought an iPhone in the last quarter, and if you have an iPhone, then buying an iPod Touch is basically pointless. That's why iPod Touch sales are going down, because lots of people in the target market have an iPhone (not that Apple is complaining too much).
A bigger iPod Touch would sell to some of these 20 million people; it would turn the iPod Touch into a mini-games console, so it gives you something that the iPhone doesn't. Now the numbers are tiny compared to the iPhone, but they could sell more than for example the new Amazon Kindle Fire and at a higher price.
Or nothing. He wouldn't be the first CEO to make a bad call. I'm not saying did not guess right, just that he made a gut decision based on non-Apple supplied info. It's like the articles state -- he is making a bet like putting a chip on red. We'll see if he gets a payoff in a few hours though.
Here's what I think Apple should do about leaks: Tell all the people in position to leak something: "If you are approached, tell us and we'll give you an iPhone to leak. It won't be like the real iPhone, obviously. Any bribes you can get out of them you can keep. On the other hand, should we catch you leaking details of the real iPhone, we'll cut your balls off".