Yeah... Verizon was notorious for this with their contract terms. BYOD or not, you were paying for it. Things have changed now that the phones are getting broken out of the service plans. But if you aren't on one of those plans, you might as well get the new device from the carrier. Frankly, it is downright fraudulent for a carrier to allow a customer to be on one of those types of contracted plans if they brought in their own phone.
Even for current customers... a while back when I still had ye old feature phone, I had stuck around on my plan, 'off contract' for a little while rather than updating to a smartphone as it would have required a sizable payment up front AND like a $30/month bump in my payment for the newly added on data plan. So every month I dragged my feet, Verizon Wireless got a ton of free money off me. That shouldn't even be legal.