T-Mobile charges $200 for a Nexus 4; at least, they did the last time I was in one of their stores. And if there's one thing the Galaxy Nexus has taught me, it's that any Nexus purchased from a carrier will provide a much worse experience than one purchased on Play (due to carrier malware and delayed software updates).

  > Also, no law dictates that you have to sign a contract
  > to get cell service in America. One can as well choose
  > from few of the cheaper prepaid services.

Equivalent service from the same provider is typically charged at the same rate, regardless of whether the customer has a contract. That's my point -- since there's no difference in service price, it's silly to say the phone is more expensive under a contract plan.

If you're comparing different service providers, then of course there will be some who have lower monthly rates and higher initial purchase prices. The tradeoff is that these providers usually provide much lower-quality service.