You have the option of buying a full price unlocked phone from a retailer and a pay as you go SIM from any GSM (by GSM, I mean GSM/UMTS/HSPA/LTE - technologies of the same family that use SIMs) carrier and you won't be locked in any contract. If you don't like your carrier, buy a SIM from another one and put it in your phone.
That's harder to do on SIM-less CDMA carriers where you have to buy a phone from them. They might let you pay full price and sign up without a contract. I'm not sure. But you have to buy the phone from them, you don't get to choose from the vast selection of unlocked GSM phones out there and your phone can't usually be used on another CDMA carrier.
It's even harder to pull off in the US where 2 of the 4 major carriers are CDMA and the other two GSM carriers don't even use the same frequencies for 3G. But in Europe, it's more practical. Plus people in the US like getting phones for dirt cheap in exchange for a two year contract.
The SIM in most phones is underneath the battery cover. In the Phone, it's hidden away inside a tray. Put a bumper or case on your phone and you won't even see the tray. What phone are you using where the SIM is an external eyesore?
15 year old phone with a SIM card:
Recent phone with a SIM card:
Yup, looks like design has been held back thanks to the SIM card.
Hmm, what's more user friendly. Swapping a card between two phones which doesn't even take a minute. Or, installing software/drivers on your computer, then plugging your phone into a computer, then opening said software, then doing whatever's required in said software to update your phone.
Even my parents who are computer illiterate can swap a SIM card between two phones.
I think in 20 years, we'll still be using SIM cards and laughing at your post.