Consider a few things when asking this question...
- Buying a phone outright means it is not locked to a carrier...this in turn means better value when you try to sell it, and an easier sell (since it's more widely usable)
- Buying a phone outright means you can walk away from a carrier if the service becomes poor and you want to try something else without the need to pay termination fees.
...and let's face it...looking at the list of things you have in your signature, you're no stranger to spending big bucks on high ticket items from Apple. Why such a sudden distaste for expenditure if you've purchased a Macbook, an iPad (x2) and a Mac Mini...all of which cost close, equal or more than the iPhone without contract. This is a pocket computer...the abilities of which are understated by the common place of the device itself. To be 100% honest, given how much phones USED to cost back the days of brick nokias and other prehistoric models...$700-$900 for the iPhone is a damn steal.