Hard drives don't cost $15, and they have a price floor that is much higher than flash.
Yes, you're correct. According to iSupply's iPhone 4 teardown,
Apple pays $27 for 16GB of flash. They estimate that
Sony pays $38 for a 120GB HDD. Hard drives don;t get any cheaper than that, though.
Sony probably needs more than 20GB of flash, though, since that was the lowest spec machine they sold and tested for. So maybe next year they can release a model with no HDD and save a few bucks. The trouble is, $10 in parts cost doesn't buy you much retail price flexibilty. It's really only useful if you're trying to reduce your losses on below cost hardware, and I think they've lost their taste for hardware losses this gen. Maybe a very, very late revision to try to get to $150 or something, but that's a ways off.