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.
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".
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