the iPod could be seen (from Apple's strategic view) as nothing but the portable extension of iTunes
Nope. It's very much the other way around. If you look at the financials, iTunes is, at best, a break even prospect. There's a massive amount of profit in iPods though. Apple has iTunes purely as a way to sell more iPods... after all, if you want to download music from the iTunes store and play it in its native format (which will give you the best sound quality), you only have one choice -- an iPod.
Like many others, I have no real interest in iTunes or any DRM... would love a portable player, but they're just too expensive for my tastes right now. I've already ripped all of my music to high bitrate MP3s (~224 kbps, 80GB total) for playing around my house (computers and TiVos). I'd love to have the collection available in my car or wherever else I happen to be, but not at the going prices.