Phil. Big Red has its own logic, based on Big Green, gobs of it. I wouldn't be surprised if Apple has a hand in it too but that's just a guess on the control freaks from Cupertino.
I don't see why (logically) they don't sell and allow a phone which the user pays FULL price for ($650 and up) and pays for service extra ($5 a month minimum) when they will allow it on month to month.
But at least there is SOME KIND OF non contract option. Att didn't allow anything but the original iphone on any kind of non contract option.
My guess is that a lot of ViPhones will end up on byod Vz mvnos like Page Plus and byod cdma regionals like Cricket once the phone flashers and dealers figure out how to bypass direct Verizon activation.
I don't know if the iphone will ever be offered for prepaid. A live Verizon prepaid operator told me that it may be in the future, just not right now. So the only places you can get iphone on prepaid in the near future short of the hacking succeeding is gsm iphones on gsm mvnos/prepaid carriers like Att Gophone, H20 gsm, Air Voice or even Simple/Tmobile.
If you're in an area that is fine without Verizon coverage, that is an option for a lot of people.
And it hasn't been proven yet if even mighty Verizon can handle what is expected to be millions of new data gobbling ViPhone users being used on their network.
We'll see with a little time.