This issue of sound quality is an interesting one for me. I am certain it can be improved, but I believe my phone and my ipod both have very good sound quality currently. Since I primarily listen to them when I’m on the go (walking around downtown, my neighborhood, in the airport, while running, when flying, on the train, etc.), I’m not sure I could hear or appreciate better sound quality in those contexts. When I really want high fidelity sound, I listen to my stereo at home - with great speakers (or a great headset) in an environment where I can control the ambient background.
Also, when I’m on the go - especially when I am running or navigating around a different city - I want some of that ambient background noise to inform my situational awareness.