Depends on your priorities.
Classic gives you a lot of space, but has to be synced thru a computer.
The touch lets you play games, surf the web, get content independent of a computer sync, and basically does most everything a smart phone does with the exception of phone calls.
I own a classic because I have a very large library. I have 300 something audiobooks. No one device could hold them all. I had a few on my phone, a few on my kindles, a few on my iPod nanos, and more on my iPad. But there were still many times when I wanted to listen to something and would need to remove something and wait 30 minutes or so to download the book I wanted. It got to be a real hassle and waiste of my time.
I couldn't be happier with my classic. I have had 3 iPod touches and sold them. They aren't for me. If I want to play games, I have my vita. If I want to surf, I have my iPad. If I want to listen to music, I have my nanos (and now a classic). Whatever I would use a touch for, I already own something that does it better.