Iphone 6 64gb 2yr contract pricing $899

Question

I recently bought a new iPhone, upgrading after a previous 2yr contract to a new one at AT&T. The phone was bought at an Apple Store and when asked I was told that my contract remain the same, all the discounts are not affected and it would be a same 2yr contract as previously.
This is not the case. AT&T sent a text message (how ridiculous) a couple days later with the following:
"Upgrading your new device on a 2-year wireless agreement means you are no longer eligible for your Mobile Share Value1 monthly smartphone access charge discount. This discount is $15 off the $40 per month 2-year agreement rate access charge for Mobile Share Value plans that include less than 10GB of data. This discount is $25 per month for 10GB or higher Mobile Share Value plans.
Other ways to keep your Mobile Share Value monthly smartphone access charge discount include choosing AT&T NextSM, paying full price for a smartphone, or bringing your own smartphone and adding it to your account."
I went after it because it sounds pretty outrageous and that's what I figured out. AT&T's policy has been changed. Previously, the phone was discounted when 2yr contract was signed and every month the full price of the phone, which was included in the monthly bill was credited. This is not the case anymore. When signing a 2yr contract now, this $25 monthly credit is lost and basically with contract we are supposed to pay the full price of the phone during the contract period. To make even more nonsense, depending on the data usage the price of the 64gb iPhone 6, which is advertised as $299 with contract is actually $299+$360=$659 for a <10gb plan and $299+$600=$899 for a >=10gb plan. 2 different prices for the same phone, while already paying more for the extra data in data plan.
I found this surprising because everywhere (from Apple's keynote presentations where the new products are introduced through the webpage to the Apple stores) it is misleadingly advertised as a $299 product with contract.
I could even understand that the carriers want to increase their profit, although they actually do that when charging extra if someone upgrades the phones more frequently, but this is a major difference in the pricing of the iPhone. I am sure I am not the only one who got shocked by this policy and would like to achieve the following two goals:
1. Better information before purchasing. This is something Apple and the carriers should work out. There is no point advertising something $299 if there is no way to buy it for that.
2. I think it is a bad business practice from the carriers and I would appreciate if Apple could try to negotiate a more suitable solution for the pricing. It is obvious that if people are forced to pay $659-$899 for a phone instead of the "suggested" $299 they will upgrade their  phones 2-3 times less frequently.
I hope anyone who is thinking of upgrading will find this useful.

Answer 1

I went over and over this prior to deciding to upgrade from my iPhone 5 to the iPhone 6. However, I knew in advance that I would no longer get the $15 discount on my Mobile Share Value plan. The discount that Apple would have been referring to is that if you are getting a percentage off based on being in the military or working with a specific company, that discount will continue to be applied.
Almost all phones are sold subsidized and the cost is recouped from the monthly payments to the carrier. What was happening previously is that even after AT&T recouped the full cost of the phone, they continued to charge the same amount for their monthly service. This dramatically inflated their profits for someone that had paid off their phone (2-year agreement was complete) and they didn't upgrade to a new phone. Therefore, a couple of years ago they implemented a discount for each line that was no longer under contract. If you weren't the type of person to upgrade your phone every couple of years, this could result in a large amount of savings over time. However, once you sign a new 2-year agreement, you no longer receive that discount.
The way that they can get away with advertising the cost of the on-contract iPhone for $199, $299, or $399 is that they see the loss of a discount a discount on the plan and not having to pay more for the iPhone. Also, the discount can be different for each carrier. In Apple's and AT&T's mind, they are selling you an iPhone for $299 and they aren't going to try and explain the different discounts from each carrier that you may lose by buying a new on-contract phone.
One last thing is that the suggested price is not $299. The cost of a 64GB iPhone 6 is $650. Therefore it is sold to anyone on contract at a much lower price and then the difference has to be paid somehow. AT&T is getting that cost by removing discounts from your plan. T-Mobile does things a bit differently by not allowing you to purchase the iPhone at a subsidized price, you have to pay for the phone with monthly payments on top of your monthly bill. Of course Apple is going to say at their keynote presentation that the iPhone 6 starts at only $199 on contract. They want to make the iPhone attractive to as many users as they can. If they come out and say that the cost of the iPhone starts at $550, most people won't even go into a store to inquire.
This practice is somewhat misleading but they will tell you all the information up front by calling them or going into an AT&T store. I had one representative go over all the different options and what my costs would be almost a month prior to the iPhone 6 getting released. They didn't try to withhold anything from me and were very up front with all my questions.