I was being a little bit sarcastic about personal safety concerns. That said, you hear of people getting their iPhone snatched right out of their hands on the subway. In fact, they were warning people not to ise their smartphones in plain site on te T (metro) recently because of this. Here in Boston, theft is rampant, even at retailers. People will pick up things that aren't tied down and walk right out. My wife is manager at best buy and they just today had a district meeting discussing what measures can be taken to reduce theft. The stores here are among the top on the nation. I point this out because, general safety is all relevant on location. Even if I met you at McDonald's, I could just take your phone when I'm having a look and walk away. You might say you'll fight me for it, but I can guarantee you most people wouldn't.
It's pretty easy to get scammed especially now that carriers are blacklisting phones in the US. I can have a completely legit phone, even in the carriers eyes, the day I buy it on Craigslist, and a week later have the owner report it stolen. Hell, I could sell you an iPhone 4S with all of those things i memtioned today. It's a working phone with clean IMEI. Then, just to be a d*** I call AT&T tomorrow and report it stolen. Bam. You just bought an iPod touch from me. Congrats! Granted, the scam lies on the buyer at that point, but it doesn't change the fact that there isn't much you can do about it. I always recommend people get a phone where the seller has a box with marching serial. If at all possible, get a receipt too. This greatly reduced the chance of the phone you're buying being stolen merchandise.
At the end of the day, the fact of the matter is there is more risk selling to a stranger than walking into an apple store and handing over your phone. The level of risk may change based on your location, and your street smarts, but there is more f a risk involved. The trade in program is for those who don't want to risk it. For that matter it's the same with vehicles. People trade in vehicles to the car dealer all the time to get a new one. They could get a couple thousand more from a private buyer, but they are interested in the quick, hassle free, zero risk option.