Not the phone itself, but the plans are what drives me batty. Right now I simply cannot afford to pay around US$80 per month ($60 for the cheapest voice plan + $20 for the cheapest mandatory data plan). Now I'll be the first to admit that I have no idea what goes into phone plan pricing... but I know I can find a MUCH better deal elsewhere that meets my needs perfectly. An ideal plan for me would offer 300 minutes (since I don't even come close to using up 300 minutes most months and that's the fewest I've seen anyone offer) and unlimited text, web, etc. It just so happens that I've found a plan from Virgin Mobile offering EXACTLY what I'm looking for... and it's cheaper than what I pay now (by $5 a month). The only thing left to decide on is which phone model out of the 5 offered.
*sigh* I'd REALLY love an iPhone... but just can't afford one.
I don't think anyone can really argue with what you've laid out here. As others have stated, any smartphone is a luxury, whether its paid for out of pocket or covered by your employer. As much I would love for my wife to have an iP4 (for facetime plus the fact I think she'd really love it) she just doesn't need 90% of the bells & whistles. So it doesn't make fiscal sense to get her one, period.
The plans you quoted are a bit higher than the actually lowest available ones from AT&T (haven't seen VZ's offerings yet), but folks love to omit taxes/fees which can add up quickly. So I think $70/month is a pretty reasonable estimate depending on where you live for an iPhone with the basic package ($55 before taxes and fees).