Why Apple must charge $20 for the iPod Touch’s software update:
Apple must charge for substantial enhancements to products that do not have revenue recognized on a subscription basis or it has to restate prior earnings. The iPod touch does not have revenue recognized on a subscription basis. The iPhone does. As does the Apple TV. Hence, they get free updates and the iPod touch does not.
Just like the $2 fee for the 802.11n update on MacBooks and MacBook Pros.
It’s an accounting requirement - one of the many in place to attempt to prevent another Enron.