You buy a car...a year later you want to trade it in for a new one just straight trade... No dealer is going to let you do that without putting in more money
Not quite the same situation here. Under your example, the dealer will give you a trade in amount based on how much it's worth on the used market, and you only have to cover how much you're upside down on.
In the case of Verizon (I can't speak to other carriers), they are giving you zero value for your trade, despite the fact it'll have some value on the refurbished market. So they profit from the full value of the original Note 7 replacement sale, inflated profits on the secondary market sale when you trade the replacement in, and the full Note 8 sale. If they only required a partial payment to no longer be upside down, then it would be a slightly different argument.
And now add to this the conflicting information from carriers and Samsung, and additional industry speculation during the recall about the future, and so many people being hamstrung into phones they didn't want in the first place, it's starting to sound like this offer to Note 7 users has the makings of another PR disaster.
I've never been a fan of Samsung phones simply due to their design features, but I was still willing to consider them if they came out with something meeting my needs. After digging into the details of this supposed deal, I'm ready to remove them from my list completely. I don't know what we are going to do for my wife's line yet, as she's in this situation and wanted the Note 8. If it were me, I'd say the heck with it and go to another brand. At this point it's making LG's handling of their bootloop issues look good by comparison.