One thing to think about (from this really old bumped thread) is that movies, TV shows, and music videos can take up a lot of space. There would be some idiots out there who would want to download a 2GB movie to their iPod touch with 500MB of free space. Another thing to think about is that the iPod touch may not have the horsepower to offer up the current UI that PC/Mac copies of iTunes can with the iTunes Store. Lastly, the iTunes Store would require a minimum amount of storage on the iPod's internal memory. That way you can demo songs, look at previews for music videos, look at previews for TV shows, and look at movie trailers (all something that can be done on the full version of iTunes).
It would be nice for a fuller iTunes Store experience to come to the iPod touch but it probably won't be able to happen for another generation.
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Personally I was hoping to see more than just music offered in the wifi iTunes store. I was hoping to be able to download movies, tv shows and podcast right to my iPod Touch using the iTunes wifi store.

Apple is probably waiting to see how the music part does and if it does good they will probably add all the other stuff. I was also hoping for a full iTunes looking store. I wish they had made an iTunes store that had all the stuff that the actual iTunes store has. All you can do on there is top 10, search, and some other useless stuff. I like to look at reviews and see all of the sub genres (ex. Hot Indie Rock under Alternative) , which the wifi itunes store does not offer.
Hopefully the update will come in a couple months, i am looking forward to it.