I do not think that you are wasting space at all. I am amazed at how the quality of audio has degenerated in the last few years as compression rates increase.
Audiophiles, love them or hate them, sit back in horror as technology seems to move further and further to third rate compromise. But then if it's the Spice Girls listened to the maximum compression possible for their music is welcomed, preferably under a road roller.
To address the rest of your post I don't need an mp3 player because it's built into my phone. I know what the device used to take pictures is called and I own several but don't always carry it with me. I don't "surf the net" but use WAP to download small games and get uptodate news on the move. I do not use a mobile device for video so I agree with that point.
PS. You could start a new topic in Mobile World as it's now dead or contribute to my other thread on Mobile World click here