I agree. Android as well. Android is doing pretty well, but I have a lot of friends (in high school/college) that really want Android devices, but can't/won't pay the $30/month for data. Many of them have iTouches instead, and would love a an Android iTouch-like-device as their next mp3 player.
As I've said before, the problem is: Who is going to sell that device to the customer?
Google has no direct-to-consumer sales worth talking about. Phone carriers sell Android phones because they make money on the contracts; without the contracts they have little incentive to stock, market, or sell an Android equivalent of the iPod Touch. So who's going to step up to compete with the Apple Stores and the iTunes installed base? The same electronics companies that blew their years-long headstart in the personal music player business?