This discussion comes up with greater and greater frequency. And very rarely does anyone mention the international market. The iPod was Apple's first worldwide product, and to a large extent, the iPhone is their second. And the two are linked via the iTunes Store. So I fully expect Apple to maintain the iPod line for the foreseeable future. Basically, the iPod to iTunes Store to iPhone progression is still a reasonable game plan. Apple wants to deliver content where and when you actually want it, and they offer a variety of products to do that. It's been easier for people to dive into the iTunes Store with the knowledge that the content will be available at home, at the gym, in the car, etc.
At the same time, iTunes Store sales are down as people switch to streaming services. But that development isn't occurring everywhere at the same pace.
IMO, the idea is that Apple will treat the iPod product line in a manner that will keep it low maintenance. (1) There is no easy way to add features that would increase sales dramatically. (2) There is little to no competition. (3) It remains an important anchoring product for the ecosystem, especially in markets where Apple is only now rolling out the iPhone.
What that means is that the iPod product line will be quietly kept up-to-date without draining resources. E.g., they don't want the Touch to compete for their supply of the latest chipset. But they also don't want the Touch to be so anemic that it can't handle the latest iOS versions. Or, because everything else now has BT, the Shuffle probably will get BT as well. Or, like you mentioned, the Nano may get wifi in order to benefit from iTunes Match and wifi syncing. These kinds of upgrades cost Apple almost nothing, but they also don't drive demand. Finally, when the 4" iPhone rumors were coming out, I mentioned in a couple discussions that sharing some of the same components between a 4" Touch and a 4" iPhone keeps manufacturing costs down for both.
So, I understand all these arguments about how the iPod is getting obsolete in a purely relative sense, in places that have good cellular coverage and affordable data plans. But that doesn't mean Apple will abandon the iPod. They would still be making the Classic if the parts were still available. And just because the Apple Watch assumes the functions of a Shuffle or Nano doesn't mean Apple wants to lose customers who aren't willing or able to buy the latest $350 gadget. I mean, they want to benefit either way, while making the transition from the lower tier to the higher tier to be as easy as possible.
TL;DR — Apple will do the smart thing.