I kind of see it this way, plainly: You sign a 2-year agreement, which doesn't/shouldn't change in those two years. However, once you decide to re-sign a contract, be it to get a new phone or whatever, you're now forgoing your previous contract (or it has expired) in place of the new one. You're agreeing to the newest conditions of a new contract, so nothing is really "illegal" or "not legal" on Verizon's part.
Verizon isn't forcing you to give up a contract or plan that you only signed for 2 years. They're committed to that length of time only. If you want a new phone, and the only way to maintain your unlimited plan is to buy the phone outright, that's up to you. If you want a subsidized price and choose to go on contract for 2 years, you're at the company's will and whatever new system is in place.