I have three lines on my plan.
Line 1: iPhone 5S 16gb ETF: $325-$20 (2 months)
Line 2: iPhone 5 ETF: $325-$150 (15 months on contract)
Line 3: iPhone 5S 16gb ETF: $325-$20 (2 months)
Total ETF: $785
I can sell unlock all three and sell the 5S each for $550-600. 5 for $400-450.
550(2) + 400 = $1,500 - $785 ETF paid: $715 profit made
T-Mobile offer: no profit. They make profit off of us. They don't care about the customer. They're just as bad as AT&T/VZW.
You are forgetting an important part, though. You paid AT&T $200x3 = $600 to buy the phones. You sell them, as you state, at two for $550 and one at $400. Your proceeds then are $1,500. It cost you $600 cost to obtain them, though, ($1,500 - $600) and such leaves you with $900. But now you have to pay the ETF. So $900 - $785 = $115. Sorry.
If you trade in to T-Mobile, though, they will pay your $785 ETF, then pay you the $600 spent on the phones at AT&T, and then pay you $82 extra per 5S and $23 extra for the 5. Or, in other words, ($82 x 2) + $23 = $187.
$187 > $115. T-Mobile wins. I'm not seeing where the gigantic rip off is.
Even assuming top dollar for all three of your phones only gets you $150 extra. Making the difference between private sale and trade in at T-Mobile a negligible $78 dollars. Bottom line, there is no huge scam or rip off here.
The huge scam and rip off here is what AT&T charges per month for service. And this is why switching to T-Mobile might be of benefit.
3 phone lines on a T-mobile family plan is $90/mo (Unlimited calls and text and 500MB per phone of data) with no data overage -- unlimited low speed data. AT&T's closest equivalent is their Mobile Share Value Plan 2GB @ $175/mo. A monthly savings of $85/mo over AT&T.
Or $2040 over 24 months. Wait -- how much does 3 unlocked iPhone 5S 16GB cost? $650 x 3 = $1950. And they are your to then sell off or trade in a year or two down the road? Yup.
So really, the only question here is -- Is T-Mobile coverage / service good in your area. This is unequivocally a great deal if T-Mobile has good coverage in your area.