And thats assuming people bought it outright. When AT&T had early upgrades, it was only $450-650 depending on model. I would upgrade early for $550 (middle unit) and sell my old unit for about $400, costing me only $150 a year.
Some people can afford and willing to spend more than others.
Its a personal decision and obviously not everyone's financials are the same.
In other words it shouldn't matter if others can afford it or how, it should only matter if you can and if you're willing to spend the money towards it.
Just because my neighbor can afford a brand new Mercedes it doesn't mean I have to go out and buy one too.
People ultimately justify spending money however they want. I have a co-worker who can't fathom that I spend what I do on coffee. I can't imagine why he "wastes" so much money on comics & action figures. Neither one of us can figure out why our other co-worker "blows" all her paycheck on Genesis Pure and no one can figure out why the new guy buys so much Ham radio "junk."