The answer is simple. People are stupid. I ended up doing it because I broke my phone and needed a new one immediately for work. However my job covered the cost; otherwise I never would have done it.
However, the discounts are gone and will not be coming back unless people stop financing the phones. The discounts were provided by the manufacturers not the service providers. Now that they have hooked everyone on the phones (just like a drug dealer will do with a child) they have stopped providing the incentive to buy the product.