Because I always thought that Apple could have truly revolutionized the industry by selling the iPhones contract free from their stores. I gladly paid 600 dollars for my first iPhone (even though the original iPhone buyers were inexplicably locked into a contract even though they paid full price). Had this model taken off the cell phone companies would have been put in their place and their influence over artificial phone limitations would have been limited. Granted, Google's online sales strategy was different because there were no places to touch or feel the phones, but I really like the idea of buying a phone without the carriers getting their grubby little fingers into the feature set.
But sadly, the USA is addicted to low upfront prices with no regard to overall cost over the life of the phone. Which means the subsidization model is here to stay and the few people who choose to buy more expensive unsubsidized phones will continue to pay the same prices as every one else for their plans.
Sometimes, even the big boys get some humility: