It's no more pricier than its predecessor. And while it's of a cheaper quality than the iPhone 5, it's more expensive than the iPod Touch it replaces - Not to mention lighter, faster, better quality, and more capable.
I find that 5GB is plenty... I have 25 GB currently and I'm only using less than a gig between one Mac, an iPad and an iPhone.
5 GB might not be enough for someone who keeps a lot of photos in their camera roll. I say either save them to your Mac ASAP or don't backup your camera roll.