How ripped off would someone feel if they bought a phone at full retail and got the use out of it that they wanted? Are we talking about buying it at full price now, or at launch?
The same way that the market demands a higher price for iPhones, being ripped off is entirely subjective to how the consumer feels their money was used. It's why frothy fanboys exist; by being tools to anyone who thinks differently, they feel justified in their decisions.
I hate the yearly upgrade cycle argument. The high resale is nice, I'm not refuting that, nor am I refuting that the difference you pay each year is small compared to the full price of the new device. But you're not saving money in the sense that I think of saving money.
I paid $400 or so my N5 almost two years ago. So my investment has been $400 over the last 20 months.
Basic iPhone model two years ago was $650. Next year, you drop $75 for the new model (I think that's super generous, without looking at prices I assume they lose about double that). Now your investment is $725. Add this year, and your investment is $800.
I also don't use cases, and now you're very nearly forced to use one to maintain that resale value. Crap iPhones still sell for crap.
I realize you may have not paid full retail initially.
I equate it to buying a video game on a decent sale when you have no intention of playing it right away. By the time you actually get around to that game, you probably could have paid even less. I've done that multiple times. I saved money, but not really.
I get the appeal of playing with new toys every year, but the idea that it's a savings is, to me, only half true. I understand that our intentions toward our devices are very different.
I just never feel like it's an actual savings, the same way a carrier hardware subsidy isn't a savings. At least we're moving away from the latter, but plan prices didn't drop unless you're T-Mobile. That's a whole other beast.
tl;dr: I don't necessarily agree or disagree with your point.