This isn't "evolution in action" in any inevitable sense. This only happens if the consumer values up-front price over TCO. Admittedly, with emphasis on quarterly earnings, this is the path many companies have chosen, but it's not universal.
Which many, many, many... do.
The world's largest retailer is Wal-mart for a reason (which has nothing to do with TCO and everything to do with up-front price of goods).
Valuing up-front over TCO only makes sense for very large purchases and for business investments.
In the case of Verizon, signing up with such a plan also allows you to return and upgrade your phone after it's halfway paid off.
With phones getting more and more ridiculously expensive, there's little reason not to do this unless you'd rather be out $1000+ immediately when you have the option to be out $40/month for a couple years with no downsides instead.