I've got and used several non-apple laptops that use the row for media keys, and switch them to the function keys with a press of a dedicated fn key at the bottom.

I don't use function keys, but do use the media keys (mostly volume and screen brightness) by touch. The touch bar is hilariously named imho, because you have to look at it to use it.

If that's the case where are the external magic keyboards with touchbars?

Price? I have no idea what the markup on the touchbar is, but I'd guess it's at least in the $50 range, no?

When you're buying a $1650-4000 machine, $50-100 probably isn't gonna make potential buyers balk.

When you're buying a $99 keyboard, $150 is a fairly big difference. And honestly given the $99 price tag on Magic Keyboard, I'd guess Magic Keyboard + Touch bar would be like $199 at least. How many people do you think would buy it at that price tag? You also have to consider that Magic Keyboard currently works with windows, linux, etc, so the potential users are much wider than a Touch bar enabled keyboard, which would only work as intended with macs.

I think a lot of people balk at the price of Macs because it includes useless expensive features.

Where's the iPod Touch of Mac OS?

The Air and the mini.

I assume it's some combination of price, performance, and battery life on the external keyboard.

You can use the Touch Bar on your iPad (using an app like Duet Display, or even with Sidecar if you have a modern MacBook). I find it to be useful in certain situations.