iTunes on iPhone/iPod touch is significantly different from the Macintosh/Windows version of iTunes on a fundamental basis

This is what I observed during my past few weeks I with an iPod touch.

 iTunes for Windows (source)

The Mac/Windows version of iTunes is a place where you do at least the following things:

1. See your complete media collection (assuming you use no other media management software), and choose what music/movies/videos you want to play
2. Playback any of the content you can see in iTunes
3. Discover new content, using both catalogs and search queries
   
4. Acquire content, by either downloading free content or purchasing paid content
5. Sync content (including applications, et al.) with your portable Apple device
6. Etc.
   

In a nutshell, iTunes on the "desktop" operating systems is a one-stop place, which allows you to do everything that you can possibly want to with content (keeping Web browsers, YouTube, etc., out of the picture for the purpose of this post)

iPod touch (source: Apple)

In contrast, on iOS devices such as iPod touch, there are three distinct applications to do what all could be done in iTunes alone on a Mac/Windows machine.

1. See: Use 'Music' or 'Videos' applications. You can't see your media collection in iTunes!
2. Playback: Again, you can't playback locally stored content inside this "iTunes"!
3. Discover: Use 'iTunes'
4. Acquire: Use 'iTunes'
5. Sync: iOS
6. Etc.

And after this analysis I'm able to understand why I kept opening the iTunes application on the iPod touch every time I wanted to consume the stored music/videos.