iPhone price isn't cheap enough

I was tempted for a fraction of a second by the announcement of the $200 iPhone. Then I remembered that the phone without a plan was worthless. The cheapest plan you can get from AT&T for the iPhone is $60/month. Taxes, surcharges, fees, and other dodgy tricks will bring that up to almost $80/month. That's nearly $1000 per year for the cheapest plan. Oh, and you're locked in for 2 years. From where I sit, the price went from $2500 to $2200. That's not nearly as exciting.

Of course, a lot of people look at just the price for the device, which makes me wonder if the iPod Touch is going to stay at $300 and up. Isn't the iPod Touch just an iPhone without the phone and the GPS?