Well, let me just see if I can make some sense here. If Sprint is telling you for $165 they will let you bump up your upgrade to tomorrow, you would then pay $200 for the device. For $365 you would have a new phone, your existing phone, and a new two year contract. You could easily sell your device for $200 on ebay or something else. Net out of pocket is $165, new phone, no current phone (I'm assuming this a Samsung Epic 4G Touch).
Or you could sell back your phone for $115 to Sprint and pay the full retail price for the phone ($500-$600 depending on device). Thats $385 and you only have the new phone.
Unless I'm messing up some details that seems like a no brainer. You could pay less and still have both phones.
I've got one last annual upgrade left this August. Debating the GS3 or Evo 4G LTE (One X). Should be interesting if anything else gets announced.