Do we have any numbers on iTouch sales so far? The plan on the iPhone 1.0, was on the expensive side, but I still assume that its adoption rate was higher than the iTouch(based on the fact that I know people that have iPhones but no one that owns an iTouch).
I just don't see the added value of the iTouch if there is no phone, and city wide(let alone nation wide) free wifi hotspots are still not realized, because there is no guarantee of connectivity.