CNN: The Days of Cheap, Subsidized Phones May Be Numbered.
After T Mobile mostly did away with subsidized phone plans, the other major carriers (Verizon, AT&T, Sprint) are paying attention. Carriers lose money with phone subsidies for high-end smartphones (particularly Apple's iPhone). If they do away with the subsidy, you will have to pay full retail price for phones, but your monthly bill will be lower.
People who bought a Nexus 4 directly from Google are probably laughing at this.