I'm not saying reduce the storage capacity. I'm saying replace the hard drive with flash memory. Then even if they don't add features it's more worth the price to pay that much for something that really is nothing more than an mp3 player and extra hard drive.
This is exactly what I'm saying. But, I think we are at least 2 years away from getting the cost of 128Gb of flash storage low enough that the cost of a 128Gb Classic/new Nano/whatever you want to call it could match that of the current Classic. We may see something similar to an "old Nano" resurface in a couple of years to replace the Classic, once those costs are low enough.