If they want to call non-volatile storage memory - and the VP of iPod marketing says they do - I say let them call it memory.

Of course they may call it whatever they please — my point merely that I don't like it.
There are certain words (e.g. "decimate", "theory" and "hacker" &c.) that have specific meanings amongst certain specialist groups but are considered to mean something quite different by the layman, and these can be a considerable irritation to the specialist. We've got no hope of changing everyone else's meaning and so just have to put up with it, but that does not stop the complaints.