Orginal iPhone cost me £269 plus £35 per mth x 18 mths £899
The pricing of the first iPhone was radically different from everything else. Apple and o2 had some revenue sharing shenanigans going on, and the phone was essentially unsubsidised. I agree the cost of the contract, given you'd paid practically out right for the phone was a rip off - hence, I didn't buy one. Neither should you if you felt it didn't represent value.
iPhone 3G cost me £59 plus £45 per mth x 18mths to date £599
That was a more normal contract. You paid a little something for the phone, but it was subsidised and o2 worked out the cost of the handset to them to be billed to you over the duration of your contract.
Pretty much irrelevant. If you'd wanted a cheaper phone you could have got one.
If i do want the 3GS O2 want £315 plus the handset price say i went for £96
You're still paying for the cost of your 3G, and you're doing this bit by bit, month by month until your contract is up. At which point you're free to do as you please.
If you decide you want to break your contractual agreement early, then of course you have to pay up.
Everything here is completely
normal. It's you lot that seemingly, irrationally, expect to be treated specially by a bloody telecoms giant. I mean really, can you even hear yourselves??