I was completely nice my first post, completely neutral actually, but people like you and others seem to just post and speculate without doing any actual research. I don't know everything, but I take the time to research things out so that my answer is not based on my opinion but based on current information.
But some of you clearly have problems reading a long paragraph so lets make it sweet and short
There is no space on the iPhone logic board for another NAND chip
Unlike the iPod Touch the Iphone has extra internal components ( SIM card, speaker, gps chip, etc etc) . There just isn't enough room, its not a "zomg misterious iPod Touch technology", it's a logistical problem.
Is that easy enough to understand ?