Why doesn't Find my iPhone work?

I have set up the Find my iPhone app on my iPod, but it seems to be entirely useless. Perhaps you can help me understand what's going on here and why it's having problems.
The app is set up on my computer and my iPod. I recently left my iPod in the car, and later found it there, but the app was no help. Here are the details.
Before finding my iPod (manually), I tried to locate it via the app. I thought it could have still been in the house, where it would have been connected to the internet. (It wasn't.) Before searching the car, I opened Find my iPhone from the computer, where it told me the location of the computer, but not the iPod, which it said was offline. I turned on "lost mode", clicked "play a sound", and checked "notify me when found." Of course, since it was offline, not much could be done about it. I understand what's going on so far.
Then, I went to the car to search for my iPod, and I found it there. I brought it inside, and it immediately connected to the internet. It downloaded my email, worked perfectly. Except, Find my iPhone still didn't find it. I even opened Find my iPhone from ON the device I wanted it to find, and it still listed the very same device as "offline" -- even when I checked it from that device, which was connected to the internet, logged in, had the app open, downloading other things fine...  I can even eliminate the possibility that it was searching for a different device, because it was labeled "This Device" when I select it on Find my iPhone from the iPod. It listed the pending actions, which "will take effect when this iPod connects to the Internet." It isn't even a case where this app wasn't connecting, while other apps were connecting -- the app was connecting well enough to tell me the location of my computer. But it still said the iPod was offline.
What is going on here? In this case, I found my iPod on my own and don't need help with that, but the app seems so completely useless I don't know what circumstances would have to be where it WOULD find it. I understand the limitations -- that it can only find a device that is on and connected -- but it should at least be useful for playing a sound on a device that fell behind the dresser or some such, and it doesn't even seem to be doing that properly. What's wrong? Is there some way to fix this?
Thank you!

It sounds like the iPod's Find My [Device] feature became disconnected to the service.  This can sometimes happen after a password change or something weird like an update.
Try this and see if it helps give you some consistency.
On the iPod, go to Settings > iCloud and turn off Find my iPod (you may be prompted for your iCloud password if you are on iOS 7).  Next Tap Delete Account at the bottom and "Keep on my iPod" for any pop-ups that have this option.
This action should kick you back to the main Settings screen.  Tap on iCloud again and it should prompt you for your password (don't log in, just make sure it shows that to ensure you are logged out).
Restart your iPod by holding the Power (Sleep/Wake) Button and sliding to power off.  Wait about 2 - 3 minutes then power it back on.
Go to Settings > General > Reset > Reset Network Settings.
Go to Settings > Wifi and tap your home network and join it again.
Go to Settings > iCloud.  Sign in again with your Apple ID and password.  Allow iCloud to use the location of your device (Find my iPod switch is on).
Check iCloud.com or the Find my iPhone app to see if your ipod is now locatable.
Also, Go to Settings > Privacy > Locaiton Services and make sure Find my [Device] is turned on.

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