I'm not missing your point, I just don't feel it's very relevant or important. Yes the upgrades are similar in quality, but the technology you are getting for less than half the price is the incredible upgrade IMO if we are looking cross device, and consumers will be looking at it this way, especially if this launch will also be at best buy, radio shack, sprint, tmo, etc.
If you don't feel the upgrades are significant then you are more than able to go buy a S3, it's probably close to the price of the N5. There is only so much you can reasonably expect from $349, IMO you should expect much more out of $649. That's $300ish bucks for getting pretty much the same technology.
I think where we differ is I see that $300 as an "upgrade" or feature. It's truly not in the classic sense of course, but it is to my wallet.