I don't think they've upped the top iphone or ipod touch's capacity in a few years. I would assume they could easily get 500MB in one these days if they wanted to.
The iPhone 4S finally brought in 64gb. Otherwise it was 32gb for the iphone for awhile...
Agree though, I wish they would have more space via traditional hard disk, but I know they will not. Apple is very much for flash/SS storage (see MB Air and MBPro).
As it is anyway, they overprice the 64 and 32 by double the cost. I have two 32gb micro sd cards, at about 110$ for both. Not surprised, but my next phone will be the next gen iPhone. 200$ more for the 64gb will be hard to swallow.