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There are many bad games for iPod but also many great ones that are cheap. People can complain that iPods do more than gaming but really that's just like saying the ps3 is a bluray player and not a gaming system. Ipods play games very well all while doing other things like music video and internet.
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Saying the ps3 is a bluray player is just stupid. The PS3's main focus is gaming.
The iPod/iPhone's main focus, however, is mp3/phone functionality with random applications thrown in.
Most games on the app store are about flash/facebook game quality. Which is ok, because
its a phone.