I guess this phone is more for people who want to buy the phone outright.
This would be a great move. Google & LG underestimated the demand for people wanting to buy a phone 'off-contract'. The nexus 4 isn't the most attractive phone for me, but I definitely want one. It's a top tier phone for $300 and NO CONTRACT. I can pop a straightalk sim card in the phone and get unlimited talk, text, & data for $45/month with no contract. If straightalk pisses me off, I can switch to t-mobile or AT&T. I am not an iphone person (much prefer my S3), but I'd consider an iphone right now if I could buy a current model for a decent price without a contract.