Your iPod has not just 1 but 4 ( or more ) ways to stop the music playing on your device, Think about the reason you need to stop playing music, do that action, and your iPod will stop the music for you.
In the past, say with cassette player, Stop means the tape stops spinning and disengages. STOP was invented in the era when our sound-playing devices had a moving (often rotating) transport that had to hold the media in a certain state in order to play or resume playing. Even in the CD playing era, which most people consider the beginning of random-access playback, the disc had to get up to a certain speed to be readable and was in a state of constant spin even when the music was paused.
With digital media, it never disengages, hence Stop is redundant. With both a Stop and Pause you can resume play immediately. Today, PAUSE more than suffices. Music is just as ready to be played if you just opened your music-playing app or if you are resuming from having paused it.
Apple is very acutely aware of when things become obsolete. They are notoriously fearless about cutting out such items such as dial-up modems and floppy drives from their products even before the process of obsolescence has bared its full effect.
Now, with respect to why APPLE didn't put a stop button on the iPod, I'll add some additional rationale that is particular to all Apple design. There is no greater proof of this tendency than in Apple's approach to industrial design and user interface. Apple is very acutely aware of when things become obsolete.