I guess we all got spoiled with the price of the Nexus 7 (2nd-gen, top-end LTE model), which will sell unsubsidized/unlocked for $350. A phone has a smaller screen and a smaller battery, which you could argue makes the prices lower (battery mass = battery cost) and you could also argue the other way (more exotic packaging is required when space is at a premium).

If they could sell the Moto X for $350 unlocked, that would correspond to being roughly free with the carrier subsidy. I guess that's what has everybody disappointed. Maybe the problem is that Moto's trying to make money off of this, versus the Nexus 7 which is (hypothetically) being sold at cost.