Because it's not always the cheapest. I am consistantly on vodafone 12 month deals as I hate being tied in for 18/24 months, and for my past two phones, the overall cost has been cheaper than buying the phone sim free and a monthly plan.
Snap. My S4 is costing me £480 over 12 months, less the £240 I got from selling the S3. The S3 was also slightly cheaper then buying a brand new phone outright too.