Because so many people in the market for iTouches don't own a cell phone?
I agree that the cost is the reason, but saying that it's $3k cheaper is seriously misrepresenting things. The marginal cost of getting an Android phone over a normal one is $30/month for the data plan, so $720 in America and I guess $1080 if you're in Canada (that sucks, btw). And then you can probably subtract $50 or $100 or so because you'd probbly pay a bit more for an unsubsidized iTouch-oid than for the subsidized phone.
For me, it's relevant because I'd like to learn how to build apps for WebOS and Windows Phone 7, but I make my living developing iPhone apps, and I'm not about to sign a 2 year contract with another cell phone provider for the privilege of building for a platform that may never amount to anything.
Cheaper for developers... not users. I might not switch away from iPhone for my personal use, but if I could pick up a palm for a few hundred bucks, I might write an app for one. As a mobile developer, you have to dest on-device and the price of supporting many devices can add up quickly.
I agree that the cost is the reason, but saying that it's $3k cheaper is seriously misrepresenting things. The marginal cost of getting an Android phone over a normal one is $30/month for the data plan, so $720 in America and I guess $1080 if you're in Canada (that sucks, btw). And then you can probably subtract $50 or $100 or so because you'd probbly pay a bit more for an unsubsidized iTouch-oid than for the subsidized phone.