Yes, they introduced higher storage options, but not until component prices dropped low enough for Apple to maintain their margins at the same MSRP. The iPod had already became a gigantic hit in its own right during the 6 years between the introduction of the iPod 1st Gen and when the iPod Touch brought wireless to the iPod family.

So other than some non-sequitur facts, what's so interesting? CmdrTaco's take is the classic example of tech spec-naysaying by pundits completely misreading demand in the market. Meanwhile, AceJohnny says that it may very well apply here, which remains to be seen.