Why did they hobble the Iphone with only 8Gb of memory when the Ipod has 80Gb of memory?

The Ipod video has 80Gb of memory in order to hold movies and TV shows. Commercials for the Iphone are trying to seel the same feature. Yet the Iphone only has 8Gb of memory? How is it suppose to hold all the audio, video and data that will make it truly remarkable? Did Apple drop the ball?