Well not everyone can spend $850 on a phone because yes, that's exactly how much the current iPhone 4 costs here in Belgium. 639eur. You get it unlocked, but who cares, I need a contract to go with it anyways. I've been with the same carrier for years, so the fact that I can switch to any I want is useless. I'd much rather buy em locked and subsidized and sign up for the same type of contracts I'm already getting now on TOP of that $850.
Not to mention our contracts are beyond pathetic. To give you an example, $40 a month for one with 200MB data limit.