I don't see this as a scam at all. Yes, to get the full benefit, you have to stay with them for the next 24 months. But to get a $650 credit for trading in a 16gb iPhone that is worth about $300 on the street? I'd say that is a more than fair trade off.
Up front, all you have to pay is tax on the full-price of the iPhone 7 plus the difference of whatever model you pick that is on top of the $650. Or just get the lowest 32gb iPhone 7 and all you pay is the ~$50 tax up front (depending on your tax rate). You DO NOT pay the full price up front. But you are committed to that total cost over the next 24 months.
Trade in your old iPhone, get ~$165 credited to your next bill, and then pay just a net of less than $7 each month for the next 24 months. In the end, you did get a $650 credit towards your new iPhone 7. The best bang for the buck is those trading in iPhone 6, not an iPhone 6S+. Up to you if it's worth it. But not hard to do the math and definitely not a scam.