If consumers paid out of pocket for their phones then they would be more picky about upgrading and plan prices. It would also make upselling shitty plan features harder so the carriers would loose a lot of money.
It wasn't cheaper than all alternatives. There were a bunch of virtual operators offering better monthly rates than the big networks but I've personally had bad experiences with network deprioritization on them. Depends very much on your individual circumstance, I'm in NYC and the network is clearly pretty saturated.
This is generally strictly true, but most people don't move on to the next deal once they've paid off their device, and end up paying more than they would have had they bought the device outright, device+plan cost considered.
Did you add this time you spent into those totals? I think if you did, your math would come out differently. Personally, if I even feel the need to do any math like this, the answer is already "no, I can't afford this".
Between Reno and Las Vegas it's pretty stark, huge holes in Verizon's coverage and a few 3G CDMA only towers, while AT&T has strong band 14 coverage, and T-Mobile has slightly better coverage than Verizon but also lets you roam onto AT&T.
Meanwhile in the San Juans the situation is dire on Verizon, with only one tower just on Orcas Island. AT&T has a handful of towerd, two on Orcas and then they force roam everyone onto T-Mobile who has dozens of local towers.
So long as you are on AT&T or T-Mobile with roaming you'll have the best coverage possible, but if your stuck on Verizon it seems your in for a rough ride these days.
If this isn't obviously the case, the "normal" plans are subsidizing phone sales. This means that you're almost certain to be better off with a vendor that doesn't offer this or at least offers it in a way that isn't dishonest.
At the end of the day, even if what you say is true making use of this deal makes things worse for everyone because it is part of a larger strategy. Inevitably you will be squeezed for more money than you otherwise would, sometimes it just takes a while.
To your credit, just stick with the subsidized phone deal, and then don't upgrade when it's paid off. At that point, your phone is now technically unlocked