To touch or not touch

I've had this opinion since the 3G iPhone release, but am only getting to write about it now.

I think I am part of a very large contingent of people who where (and still are) awaiting the release of the iPod touch V2. Since it was first released I knew that the touch was an incredible product and enviously played with a few of them. Music, of course, video, excellent, and just to top it off Wifi. Being able to connect to Wifi hot spots at great speeds and not having to pay a cell provider a bunch of money for a limited service are huge plusses for the touch. Yet there were a few things that held me back from jumping on one from when it first came out was space, and cost. Upon its release the touch came out in 8 and 16GB sizes which carried the price tags of 300 and 400 respectively. In talking to my compatriot Phil we both came upon the same conclusion, its simply not enough space. 16 gigs on a device which can store video, including full length movies, is insanely small. This was coming from the guy who was having trouble squeezing just his music onto a 20GB iPod photo. I decided that I would wait till the second round of iPod touches since they would increase capacities to 32 and hopefully 64 GB and make some software improvements.
I was really disapointed when I found out they were going to release a bigger 32GB touch, but it would still be the first gen. Mainly, they added this on top of the other two sizes, without a price drop, which left the largest model with a hefty price tag of $500. This also meant that they would not be releasing a touch V2 anytime soon.
Fast forward to today, and I am still torn about what to do about it. Surprisingly, Apple has yet to drop the 8GB touch which means prices have stayed the same. To pour a little fire on it, Apple has continued to stick it to touch users by charging them "nominal" fees for software updates. There have been (I believe) three updates so far which have been free for iPhone users, which touch users have had to pay for. Why Apple? I don't see how Apple can justify charging touch users but not iPhone users, either charge both or none.
I guess for now I'll continue to wait and hang on to my old school iPod. Perhaps soon enough Apple will decide to lower prices on touches and toss in those updates for free and then perhaps ill change my tune and put my money where my mouth is.