Back when the Nexus One came out, it was $579 to buy it outright, or $179/$279 to buy with a 2-year contract (depending on if you were an existing customer or not). Buy on contract, cancel, pay the $200 cancellation fee, and just then you're already $200/$100 ahead. Then consider you have 24 months on a plan that costs $20 less each month than it would under contract, and that's $480 saved, not to mention the freedom of not being tied to a carrier for those two years if you do decide you want to move.
And as a bonus, T-Mo is very tether-friendly. They'll throttle you if you transfer more than some amount of data per month (which I've found to be a non-issue in my personal use), but otherwise they don't care what you do with the data connection.
If I had not received a Galaxy Nexus for free at Google I/O, I would have likely purchased a device for $350 from Google and then activated it on Red Pocket or some other GSM MVNO.
It's important to realize that often, prices like $600 for a smartphone are deliberately inflated for the sake of encouraging people to sign their money away on cell phone contracts. This is illustrated by the fact that the Galaxy Nexus, a relatively high-end device, is available absolutely unsubsidized, for $350.