1) Yes, but simple upgrades like an oleophobic screen can't cost more than $.10; I would have much preferred that over voice control. Also, Apple could sell their iPod Touches at a loss and still make gobs of money net profit from the App Store. Also, Zunes have similar pricing and also have innards that have probably roughly equivalent pricing.
2) It does when you factor in all the extra people using the App Store.
3) I don't remember the Palm laptop. It must have been highly successful.
1) I understand where you're coming from here but the fact remains Apple saw no value in adding a camera being it for financial reasons, branding reasons or general product placement reasons. Comparing to a M$ product is an unfair comparison because M$ generally will put more features in and absorb the costs (XBOX Elite is a prime example now) and it refers more to "critical mass" marketing which Apple never has really done even though the iPod has been so popular. The idea being is you beat everyone else on cost and feature to capture market (even if you sell for a loss), I really can't see Apple doing this ever.
2) They still need to differentiate the touch from the iPhone, if it means removing/adding features so be it. Apple see the touch as a gaming device thus the market push and development will be around enhancing those features. Agree or disagree the Apple doesn't want to sell the touch as a cut down iPhone but is still shares the common selling points like design, App Store, etc.
3) The point I was making here companies spend a bomb on R&D with the hope to sell new product, some make it to the market some don't. The Palm Laptop was one product that was ready to go then pulled from sales at the last moment. I suspect Apple has done this with the touch for camera support, they saw no need in adding it.
http://en.wikipedia.org/wiki/Palm_Foleo
http://tamspalm.tamoggemon.com/2007/05/30/the-palm-foleo-palm-goes-laptop/
http://gizmodo.com/264550/palm-foleo-a-laptop-for-your-smartphone