I think the only reason to go with a contract, and you already said this yourself, is to get discounted new fancy phones. However, one other reason may be is that if you know you are going to be with that carrier for a while, and they are offering some sort of sign up deal, then maybe that would be a better deal and you will be locked in with that system. I know when I got my new contract, I was locked in with double the data for the cost of normal data rates. I still have this deal. But other than discounted new phones or a great service deal, there isn't much of a reason to contract up.