No. As you can see here, 256GB of flash costs about $50.
Apple cited decreased demand for Ipods as the reason why they phased got rid of them. I have no doubt that this is true, but 1) despite being decreased, there was still a viable market for them; and 2) Apple *wanted* Ipod demand to decrease, because they went all-in on the phones and cloud storage. Apple doesn't want its customers walking around with music personal music libraries stored on their devices, they want people using their cloud services. Preferably, with one of their phones.