Yeah, that's it I guess. I consider it an "Apple Tax" as it does less and costs more, but others are willing to pay it because they care more about form factor and having something that looks nice, is thinner etc. I'm not very focused on how nice a device looks. I love my Kindle 1, and it's certainly not a sexy device.
I just want things that work and do what I need, I don't care so much about being a quarter inch thinner etc. Especially to pay twice as much for the thinness and sexiness and miss out on features I use a ton like the FM tuner (which I use as much or more than I listen to mp3s on it).
As for controls, I prefer the touch strip to the wheel on iPods personally. More intuitive to slide up and down to scroll through vertical lists than to touch around a wheel. But to each their own on that of course.