Contract phones back in the day were not bad. You spent £600 on a 24 month contract for flagship phone and after that you got to keep the phone. Now it is a real rip off and I just tend to buy outright and cheap contract on top. Even then though I would normally put £150 down to cheapen the monthly payments.
Not really, it's all driven by the RRP of the phone, the RRP's have gone up so the prices have gone up. Generally speaking it has always been the case that contacts have been more expensive. Your complaining about putting £150 down and suggesting the solution is to put £700-£1000 down instead. It's not surprising the latter as the potential to get a lower overall price as nothing is being financed at all.
The flip side is that you can pick up the latest flagships on launch for the around the total cost + service for less than the equivalent sim only deal and buying the phone outright. Sourcing the contract from a 3rd party seller like mobiles.co.uk can be cheaper than buying outright. People are just don't shop around, go directly to the network and pay 15-20% more than they need to.
The exactly the same issues applies to car finance, loads of people use dealer finance on used cars when in reality they could get a far cheaper finance product from a regular bank to buy the car outright. People also don't consider the balloon payment at the end of PCP's when factoring in their 'monthly payments' so they think 'buying' (renting) new is cheaper than buying used. People also don't think to use the dealer finance to take advantage of any additional 'discounts', cancelling it within 14 days and using a cheaper 3rd party product to replace it. Some people are happy to pay more for the convenience, the reality is most don't even check that the product they are being sold is priced competitively.
People generally just don't sense check what they are actually doing or apply any kind of critical thinking to expensive purchases, they just see shiny new toy for X per month. Who's fault is that, the person buying or the person selling? Unless the person is genuinely vulnerable then they shouldn't need to be protected from expensive finance deals, saying no is a perfectly valid option.