I wouldn't characterize this as a contractual dispute. What it is is a market aberration that has been eliminated.
I suspect what happened is that Google released the Nexus 4, which is a subsidized, unlocked, no-contract premium smartphone, and since T-mobile's network isn't great in many places, Nexus 4 owners flocked to ST AT&T service because they got the benefit of a subsidized high-end phone and an unlimited data contract with a carrier having a strong network at a lower monthly cost than if they had signed a contract with AT&T. And even if they signed a contract with AT&T, AT&T is no longer offering unlimited data contracts so they got something they couldn't even get by signing a contract with AT&T - unlimited data on AT&T's network - and they got it at a lower cost than a capped data AT&T contract plan.
This was a market aberration that occurred due to Google being able to sell subsidized phones because Google doesn't rely on profits from hardware sales. Rather, Google makes its profit from advertising sales and by selling a subsidized phone that runs their operating system that incorporates their search engine, which is how they make their profits on advertising sales, they generate profits. For a short time, this gave those who recognized the market aberration and acted quickly an opportunity to get all of the benefits of an AT&T contract plus unlimited data (which isn't even available from AT&T anymore) at a lower cost and without having a 2 year commitment. It was only a matter of time before AT&T realized this and eliminated this market aberration by raising the fees it charged ST.
As long as Google is going to sell subsidized GSM phones that work at the AT&T frequencies, I doubt you will be able to get AT&T low cost, no-contract, unlimited data service anymore at least as a new subscriber. And we will see how long ST can continue to provide the AT&T unlimited data plan at this price. This is Microeconomics 101.
If I were you, I would buy grandma one of the remaining $90 ST AT&T SIMs and be thankful you got it at $90 instead of at $200.