Simple: Because Apple can get people to pay $599 for the iPhone.
More specifically, they can get people to sign up for $XX/month plans, which means Apple can get AT&T to pay them $399 for the hardware. There's no such deal to be made for the touch, thus it's $199.
As for the components, I'd be surprised if an iPhone off of the line in China would cost much more than $50.
Simple: Because Apple can get people to pay $599 for the iPhone.
apple can get people to pay over $1000 for an iphone. those phones that are sold unlocked in other countries that aren't subsidized go for well over $599 on ebay:
More specifically, they can get people to sign up for $XX/month plans, which means Apple can get AT&T to pay them $399 for the hardware. There's no such deal to be made for the touch, thus it's $199.
As for the components, I'd be surprised if an iPhone off of the line in China would cost much more than $50.