Turn iPhone 4s into iPod Touch - will not recognize sim card

My iPhone 4s will no longer recognize a sim card. I didn't trade it in b/c the Apple salesperson said I could still use it as an iPod touch. (I want to use it at home to play Pandora/iTunes/Sirius over wifi to bluetooth speaker.) The salesperson did not warn me not to reset the phone.
After completing the reset, it will not allow me get past the "no sim card" message. How can I bypass this in order to use the phone as an iPod?

Yes - I took it to ATT and they put in 2 different new sim cards. It will not recognize them at all. I took it to Apple and they said it was hardware (though after reading other discussions here, I am more suspicious of iOS 7).
They offered a trade in but I asked if I could still use it as an iPod touch. The genius dude said yes, but did not not tell me I could never reset it. Very frustrated.

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