It sounds like what you are referring to is more along the lines of promotional credits to get you to sign up with the carrier for a new phone line / contract, isn't that right?
They are willing to incentivize you to join their service so giving a generous trade-in may accomplish that. It doesn't represent what the real value of the phone is, they are simply using the appearance of a high value for your older phone to get you to commit to them for a period of time.
Nothing wrong with that. If your old phone is just sitting around and you don't have any other use for it, great. But my suggestion is that you make the decision based upon what the resulting phone service cost will be for the period of the contract you'll be agreeing to.