Yikes! I bet they will start doing this with phones and laptops. Yet another reason to avoid these subsidized deals. I'm not committing two years of my life to anything, especially not a data plan.
I don't see a real issue with a contract. I have been on Verizon for many years now, and have kept renewing my 2 year contract and get a new phone. I'm going to have a phone anyway, so the contract doesn't scare me a bit.
This whole idea seems reasonable. They should load a bad firmware into a backup ROM, and then copy it over to brick the device should the user not pay.
...if they could do it and track who was locked out from company to company so that those people don't just "get a new plan"...things would be much cheaper for the rest of us...