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.
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.