Personally I just don't particularly like AT&T and what they are currently charging for the iPhone is ridiculous, and shows how small minded many Americans are.
The country is in a huge recession, and millions (that already have previous gen iPhones) are jumping at the chance to pay a LOT more for little difference.
I agree that the new rates are a bit high but I also don't see the value in 3G so I am quite happy with my original iPhone.
I think your characterization of Americans being small-minded over the iPhone to be a bit harsh. It really is a great device that's function overcomes the lack of service one may get from ATT. And the economy is in a slow stall but we will not know for several months if this is truly a recession.
And I can think of quite a few other things that show how small-minded Americans are.