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.
If you were going to buy a plan from AT&T anyways at $60/month, they are willing to give you a $800 phone for “free” if they can lock you into a 2 year contract.
Buying your own phone for $800 and paying $60/month isn’t a better deal but it does give you flexibility to drop the carrier whenever you want.
Consumers can decide.
Banning a consumer option sounds anti-consumer, not pro.