Then I don't understand your point. You say it isn't a failure. But you also say it's suicidal. Isn't suicide a failure?
Let me see you move a 12 GB movie file to that thing. I’ll watch. If it’s a media platform (and let’s at least admit that that is exactly how they’ve been positioning it), then it has to readily interact (i.e. have appropriate interfaces) to facilitate it. You can’t do everything via bluetooth or 3G or Wi-Fi or the Web. It just flat doesn’t work that way.
I download movies to my iPod Touch and watch them. I guess what you are complaining about is that you would have to download the movie from iTunes and pay for the rental. Is that what you are unhappy about? And you don't like the codec algorithm that Apple uses to make the video file smaller?
Go back and read what I wrote. You’re reading ‘too fast’. Also, my points have nothing to do with ‘cost’.