Does the Touch take the same apps the iPhone does? If so, she'll have access to Kindle and tons of e-books, lots of language games, math games. And it's easy to carry in a backpack.
DD had several language-building tools when she was growing up and I never regretted it. She's a big reader now, prefers real books as opposed to ebooks, and she tends to do really well in school. I think your daughter will enjoy the Touch.
Let her bling it up and make it her own. 
Roxy
Getting in touch with my inner try-athlete.