Today, buyers usually get the phone as part of a package plan, rather than buying it up front and going to find a service provider. The MSRP cash price for an iPhone 6, for comparison to this phone, is around $650 for a middle version, a bit less than half the price of the $1499 brick phone. A Samsung Galaxy S4 (a roughly equivalent Android phone) is roughly equivalent in price. In terms of features, capability, size, convenience and so many other ways, the newer phones are light years ahead of the old one, thanks to the continuous improvements in digital electronics.
I've seen articles like this regularly for years, saying it's actually cheaper to buy the phone and then get a plan.
A case could be made that the major cell carriers have become modern versions of the flimflam man, using slick web interfaces and byzantine terms of service agreements in their quest to separate consumers from their cash. Point in case, the offer to "discount" the price of a new phone, in exchange for signing a two-year contract.Details and actual price examples in that article.
Something like this is just a "blast from the past" for folks who have been in the electronics business for years, continually fighting to make everything smaller, faster, better.