I don't think anyone wants to pay for the massive iPhone data plan. If the touch and phone have the same features, some people will opt for a flip phone with their touch which obviously ruins a potential customer that may have some day caved and payed apple more.
I think iPod Touch owners probably want an iPad. Does everything a Touch does, only much, much better...
I don't want an iPhone. I prefer having a cheap phone and a cheap contract and then having my iPod touch. As for the ipad I would like one, but if I had to choose between it and an iPod touch I would go with the iPod touch. It is a great portable mp3 player.
All the iPod Touch 4 needs is no camera on the front, but a mic and camera on the back to record video w/ sound and take pics. But have the shape and stuff of the iPhone 4 (Stainless-steel sides w/ glass front and back)
As an iPod Touch owner, all I want is an iPod with a camera. My cell phone works just fine, and I don't need a data plan. Also, the iPad is unnecessary when I already have a laptop.
