They could make an iPod+Cellular, but they'd have to make several design decisions; these can be posed as a series of questions:
1) Do they add the hardware most seem to ignore as well, ie. mic, top speaker, proximity sensor, does it even have a flash?
2) How do they produce this and add a new direction or spin on it so it isn't meh?
3) Do they keep the anodised metal back, or would this not provide good enough reception?
4) Would replacing the Touch's casing with...