Hey I'm going to give you my outdated not unlocked iPhone and $150 for your brand new iPhone 5 which can easily see for $800.
Does that sound fair to you?
Again, the 4S is unlocked. An unlocked 32gb 4S is still being sold for $500+ on eBay, Craigslist. Retail price for a 16gb 4S is $549 (and that's a 16, not a 32gb like the one we're talking about) $500+150 = $650. A 16gb iPhone 5 retails for $650.
Stop acting like the dude is being offered an original iPhone for his iPhone 5.
Not saying he should take the deal, but seriously guys. Actually think about it. The 5 is essentially a 4" 4S with LTE and a little bump up in performance. The 4S isn't "outdated" yet. It's still a speedy dual core phone with just as many capabilities as the 5. It's the previous generation model, just released over a year ago. Let's be real.