I've had a HTC Desire, Samsung Galaxy S2, S4 and S6. All flagship phones that I've got within a month of release and never paid more than £25/mo and £50ish upfront.
The price of these today is madness.
Both S4 and S6 costed more on release - around $750-850 (64g model) if I remember correctly, it's just the pound is MUCH weaker now. We're talking 1.6-1.7 exchange vs 1.1-1.2, that's around 35%, if anything these phones are cheaper now than they used to be. There's also the fact that until around 2014, back when phones4u were still around, you could walk into a shop and as long as u knew what u were doing you could get between 20 to 40% discount on line rental, nowadays shop staff has no access to discounts.
The quality of design/finish has gone up a lot as well, other than very few phones such as the HTCs, most were cheap plastic - the s2 was horrendous compared to HTCs at that time. The functionality and quality of components also increased.
Don't get me wrong, both my Note 2 and Note 4 costed me basically around the price of the phone (phones released around £600, full contracts costed me around £750) and line rental worked out at almost nothing because I always had a 30% discount, unfortunately most people still paid the full price and it wasn't that much lower than what we have now.
At least now you have the choice of going for a much cheaper phone like OnePlus, MotoG, Huawei and other cheaper brands and still get a really good smartphone whereas in the past, until you've spent £500 on the top model you couldn't expect much of a performer, not with android at least.
Whilst I would love to get my s8 for £400, with the current market it simply isn't going to happen - and I think a lot of people hoping for OnePlus5 to be a copy of this for £350 are going to be very disappointed. Surely it's going to be a top end device, but if you look at what they've been doing with each upgrade, the prices have been going up and the OP3T has already been £400, I don't expect the OP5 to be less than £450.