Ok. But AT&T is the only way to get an iPhone unless you want to unlock it, and there are concerns that the 3G iPhone will be much harder to hack. It's not an essential service, so it's up to them how much they want to charge for it. If they charge too much, they won't sell enough. They appear to be doing quite well at the current pricing, and I think many, many people will happily trade off higher month-to-month charges for a deep discount on the front end.
It seems to me that most iPhone-related gripes in here relate to Apple / AT&T not making the ideal configuration at the perfect price point for a particular individual.