The new iPod Photo isn't about photos. The iPod is still about music, but the next obvious step is sharing, via wifi or dump to thumbdrive or near field communication or an ethernet jack and a built-in webserver or whatever. (Your iPod is your last.fm profile.) But you can't built that kind of functionality into a music device because the record industry will go ballistic.
But, as Steve Jobs said in the announcement, people own their family photos*. You can legitimately build all kinds of iPod-to-iPod functionality in, if the iPod is seen as a platform for media that doesn't have property rights attached. Bingo. And we know people like to share photos, bookmarks, playlists etc in their social networks. But once sharing and social networking [not explicitly] can be built in to the iPod, why not add the radio functionality, the sharing of playlists, the same functionality that's already in iTunes? (It's easier to manage, from a rights perspective, because nobody else can write apps for the iPod.) Real-life Rendezvous anyone? The iPod as a physical avatar-hub for the ad hoc network--why bother stating it: your network is who you can see. Sit it in the middle of a table, switch on wifi, it runs as a shared drive so your meeting can all work on the same documents, run groupware etc (hey, corporate angle). Put it in your pocket, run a radio station for the people near your desk, or the people you pass on the street. Swap pictures, run Pokemon trading card games. But the music sharing, because really it's a music device, has to start with photos, that's the big excuse. A long term plan.
* Not that it'll be used for family photos, it'll be used for downloaded and homemade porn. Tell me again why digital cameras took off. Because they were eight times the price? Because the quality was terrible? Or because you didn't have to show a processing company what you'd been photographing in order to obtain a permanent image of some moist crevice or another?