Amazon is supposed to have discontinued the Kindle Touch e-reader, in order to make room for the Paperwhite. The Kindle Touch was priced at $99 and was apparently dropped in favour of the $119 Paperwhite, that has some shipping delays, of 4 to 6 weeks. Amazon also discontinued the 9.7 inch Kindle DX this month as well.
The best proof for the Kindle Touch replacement is just entering the Kindle Touch product page. There you’ll see it listed as “currently unavailable” and a link will point you to “a newer model of this item”, the Paperwhite. It’s sad that you’re so limited now, with the Paperwhite being sold out since early October and facing shipping delays now. The most basic Kindle the non touch one, with $69 price tag (with ads) is still available for some reason, just like the old Kindle Keyboard, at $139 with 3G and ads.
Their availability makes the disappearing Kindle Touch a mystery, although I can see through Amazon’s strategy here, as they try to make Paperwhite the new standard. However this new model is $20 pricier than the Touch with ads, because of the new front lit screen technology and superior resolution. There are also minuses, like 2 GB of storage on the Paperwhite, while the Kindle Touch had 4 GB and lack of audio or text to speech on the newer unit.