there are those of us on family plans where a smartphone means an extra $25 a month and the phone bill has to be paid. no point in buying the most expensive if your phone is unused 99% of the day
Exactly. I was going to post something like that (Family Plans).
Many people are on family plans. That means it costs (even with fees and taxes) as little as $15/month for their phone. Maybe a teenager is paying for this out of their pocket.
A $100/$200 up-front cost of a new phone (don't forget AppleCare!), plus the $18 upgrade fee may hurt.
For many people, even the 3GS is overkill. What does it lack compared to a 4 or 4S to most users? A camera flash? What if they don't even plan on taking pictures? Why would they want to pay $200+ extra (up front) for that? I know people that even *prefer* the 3GS to the 4/4S just because of the shape! Not everyone wants or needs the 4/4S.
The extra $15 a month for data is easier to swallow for most people than thinking about spending hundreds up front for features they may never use.
Besides, the 3GS is still a GREAT phone.