My last two handsets have been unsubsidized and unlocked (by choice), and yes, one of them is a Nexus One. My carrier (AT&T) does not give me a discount for an unsubsidized handset, so I am paying the monthly price assuming I had a subsidized handset. In a sense, then, I am paying twice. I chose this route not for lower cost (obviously) but for flexibility. I am now free to use SIM cards of my choosing and I have a month-to-month contract, which I also like.
The other aspect of the Google experiment is that consumers did not have the opportunity to "try before buy". The brick-and-mortar retail experience does allow this while the virtual one does not. For a complex product like a smart phone, user experience is key (a lesson that Steve Jobs taught us). User experience cannot be assessed via a web page, no matter how well designed it is.
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I think that the amount spent on advertising had a lot to do with it, as well. I've read that Verizon has spent 100 million promoting the Droid. However, I don't recall seeing many Nexus One ads (probably none in the main-stream media). The Nexus One was well know in the tech community and no where else.
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