I would say it is what ViRGE said (although I would think the antenna issue would be easy to overcome as most MP3 players us the headphones/cable as their antenna), coupled with simple supply and demand. The demand for radio of any sort in an MP3 player is not all that high. Most people consider it a nice extra that they might use every great once in a while. The main reason stuff like the iTrip sold well is it allowed people to use their iPod in their car without a crappy tape deck converter (and thats if their car has a tape deck). AM radio is even lower on the list (although I'd say the number of people who listen to AM radio and feel it is essential is higher than those for FM, the number of people listening to FM is far higher, at least I would say, but I don't have broadcast numbers or anything like that).