You and others on HN are probably not the target for the iPod Touch. Just spend some time with my sister and her friends and you'll quickly see that a bunch of them have iPod Touches and most of them are just used for playing music (with a few games here and there)
My sister also has an iPhone, but she's not really tech savvy enough to download apps and actually use them. She's downloaded a few apps, but most of the time she just uses her iPhone as .... a phone.
I'm not sure you're correct. I have a simless old iPhone, equivalent to an iPod Touch, and it runs apps exclusively. It has barely been used for playing music.
In fact, the beauty of apps means the hardwares purpose is completely malleable. In my case, it is primarily a mini-Bloomberg reader and alarm clock.