They aren't insanely high, they work out cheaper over 18 months than the contract phones (or at least they do on some tariffs).

They aren't even insanely high compared to the iPad prices, in fact the 32GB iPhone is exactly the same as the 32GB iPad (and I'm sure the iPhone 4 costs no less to make than the iPad). They are basically the same price as the 3G/3GS was at launch (or at least close).

Sure I'd like to pay less, but why exactly do you think they are insanely high ?

They are of course high compared to the HTCs and Blackberrys, which you can get "free" on some relatively low tariffs. But that isn't news. The iPhone is 25%-30% more pricey that the "equivalent" phones from other people. But then I, and I suspect you, don't think they are equivalent at all