1st rule of suing: go where the money is :). Is the iPod really louder than other players? Perhaps it is…
More in-depth analysis:
Apple has no interest in making you deaf, because then you can’t use your player and you won’t upgrade to the next player :).
Apple shipped this as an intellisense feature. Original problem: the music is too loud, and it’s annoying to have to turn it down using the volume switch. Solution: make the user deaf, which makes the music not as loud, and you don’t have to touch the volume switch!