There is nothing ridiculous about Nexus phone pricing. Very aggressive yes but it's no different than what Amazon first did with their Kindle Fire tablets.
You say it's like having US carriers determine what's appropriate for cell phone pricing? What do you think we have now? US carriers absolutely determine the current cell phone prices. It's nice to see someone like Google trying to change that. Apple isn't going to do it. Apple is in bed with the carriers and part of the problem. But Google can't do it alone. Hopefully they'll get some help from Amazon and Facebook in the future.
US carriers determine the current cell phone prices of subsidized phones. The fundamental issue is the lack of interoperability between the US carriers and the fact that unlocked phones are meaningless in the US except maybe to AT&T. Europe and Asia all have subsidized phones on top of unlocked phones. It's the fact that people there understand you can just buy a phone unlocked as they're all sold unlocked and unbranded.
In the US with phone exclusivity, and carrier pricing, the lack of an unlocked phone market, yeah you're trained that going through the carrier is your only option. And given that many people here only started venturing into the unlocked phone market recently, I can understand you'll shudder at the $600 pricetag. But what I'm saying is this has been a standard around the globe forever. The $600 pricetag isn't because Verizon says it's $600. That's just the market price.
I'm all for a lower phone price, but there's tons of industries out there that have excessive pricing. Look at Ultrabooks for example. They're priced at $1000+. The BOM isn't any more than a standard laptop I'm sure. So what is the strategy now? Have Microsoft contact Dell and make a "Microsoft experience" PC and sell it for $499? Dell might not mind as much because like LG they're getting SOME sort of benefit. But how do you expect the industry to follow suit? Even if $499 makes a razor thin profit, it's the fact that you overturned the entire industry. You currently pay more for ultrabooks because it's the new thing. What about traditional laptops? Thicker but cheaper laptops? Like Lenovo's T series is well under $1000 but a high end laptop. Ultrabooks are $1300+. If you drop a Ultrabook to $499 then what becomes of the T-series? Does it die? What about those who want that?
Similarly if you want every flagship phone to drop to $349, then what happens to the mid range phones? Like the SGS2? External forces changing pricing is dangerous. I'd prefer competition between device makers to drive prices down. And if it's really price fixing, then slap them the same way LCD makers got slapped with fines. This is like saying the solution to high LCD pricing is to have Comcast come in and give you a free TV with cable subscription and expecting prices to revolve around that.
The real solution is to get America out of the grasp of the gestapo carriers. They need to stop making carrier exclusive phones and allow you to jump network to network. Certainly that will take some technology upgrades, but the iPhone 5 for CDMA networks is currently quite compatible across networks.
The FCC needs to work with the carriers to figure out a solution too. For example in Europe/Asia the 2100mhz block is shared by the carriers. Why is it the 700mhz block needs to be divided up into A, B, C block? Why can't the 700mhz block be 1 block and then allow compatibility across the networks? I don't see people in Europe and Asia cringing at the $600 pricing. It's just a standard device cost. If there's competition to drive that down, so be it. And once you start decoupling devices from carriers, carriers should be able to lower prices. That's another issue--the fact that carrier pricing reflects the fact that they have to pay back handset makers, and so the costs of the device are borne by the subscription plan. BYOD plans need to exist and should reflect true cost of the service. Kinda like Comcast's plans. You pay extra per month if you need to rent the modem.
I'm not against lower prices. I just think the right forces need to be in place to drive prices down. The solution for cheap PCs didn't come with Microsoft selling a device for 50% market price and then recouping those costs with OS sales. The pricing of the Nexus isn't ridiculous. It's the expectation that the industry needs to move to market price = BOM + $5, that I find outrageous.