OK, so forgive my ignorance, but why can't SSD use the same technology as RAM?
Because RAM needs electricity to "remember" anything. Hence when you lose your Word document when the power goes out. Flash memory is non-volatile, so your thumb drive doesn't need a battery pack.
The trade-off is "memory wear." When you're talking about thumb drives or cards in cameras most people will either lose or upgrade long before they start to suffer wear-related data loss. But when you start having flash HDs or mp3 players it starts to become an issue. Especially when you have more songs than your flash iPod will hold at once. You're then a lot more likely to make large-scale data updates every time you sync as you pick and choose which playlists you want on there at that moment.
Combine this with the fact that rechargeable batteries have a similar "charge wear" issue and you have a device that screams "planned obsolescence." But as Doc said, newer flash tech is a lot better about memory wear, both in expected write-erase cycles and because of memory spreading techniques that help keep your computer from trying to change bit 0 every single time while leaving bit 999,...,999 totally unused.
HDs don't have the memory wear issue but whenever that disk is spinning there's a chance for mechanical failure. Not to mention wear over time on the moving parts. It's also very delicate while it's moving. IPods try to fight this by spinning up the HD as little as possible and relying on RAM, but if you drop your player while its in the middle of accessing the disk you can cause serious problems.
So in general a flash iPod has a much greater MTBF than a hard drive iPod with similar specs. About the only way an HD unit would last longer was if you never moved them, and completely erased and restored them both every hour for like 2 years. Hell, even then I might put my money on flash.
But of course flash costs a lot more per gigabyte, comes in smaller capacities, and has slower read/write times. Which is why a 120GB Classic costs less than double a 16GB Nano instead of 7.5 times more.
MTBF = Mean Time Between Failures. Higher is better.