More features on a product doesn't necessarily mean it's better. Apple is the one company around today that gets the "user experience" versus the feature list. Having a good set of features on your product is important, but if the usability is terrible, it doesn't matter if it has every feature on it, it won't catch on.
Apple has also done a good job of adding features to the iPod as needed. Everybody gets on their case for not producing a video iPod, but there is almost no content for such a device, so why make it?
The iPod is not just about style. It's about user experience. That's why it's dominating the market. All the other players think that the key to toppling the iPod is to add a feature that the iPod doesn't have. Everytime they do this, the iPod's marketshare goes up. Granted, it won't last forever, but I believe in our current state, Apple has the right balance of usability/feature set.
Personally, I'm suprised that four years in to this, that no other manufacturer, including Sony, has produced an MP3 player that's anywhere near as simple, intuitive, elegant, and feature packed as the iPod.