With reference to your question why "anyone would buy the touch these days?".
I have quite a few friends with children of the age where they are desirous of the iPhone, but are considered too young for the phone by their parents.
They get given the touch to use as a toy for gaming, internet surfing and music etc, until they are old enough to "graduate" to a phone, at the age determined by the parents.
Well, I think the internet is something to be restricted more than calling people. The internet is where sick depraved people live. With a phone... you can call people. Seriously. Which one could get your kid into worse trouble?