First let's put the blame where it belongs. It is Verizon's fault not LG/Google.
Why? ... Because even if the Nexus 5 had the correct frequencies it still would not be able to work.
Technicalities:
Verizon does voice calls using CDMA technology. No CDMA phone will work unless the carrier approves the device on their network. SIM cards are not used for this network. SIM card is only there for LTE (data) and international GSM roaming. If the phone had the Verizon CDMA frequencies it wouldn't matter. For example take Sprint's MNVO Ting. The Nexus 5 has Sprint CDMA frequencies, the same ones Ting uses. But Ting has already stated via Twitter that Nexus 5 will not be activated on their network. Because Ting feels like it. This isn't a technical problem. There is nothing you can do to put the Nexus 5 on Ting even though there is no reason technically why it wouldn't work. It is just Ting flexing their control and using the way CDMA works to flex their muscle.
For 3G data Verizon also uses CDMA. So same restrictions apply as voice.
For 4G data Verizon uses LTE. For now LTE is not used for voice calls. Here is where the SIM card would work for just data if the Nexus 5 had the right frequency band. Verizon's nationwide band (13) is missing. It could have been included but it would be pointless to have a phone that can't make and receive calls (because of my previously stated CDMA restrictions) and only connects to the Internet. Verizon does have a second data band (4) that is included in the Nexus 5 but that band is very very sparingly used on Verizon ... Like almost nowhere. That band is in the Nexus 5 for T-Mobile and to a limited extent for AT&T.
So the Nexus 5 was made to purposely not work on Verizon because of the disagreement between Verizon and Google. Look back at the upgrade mess the Galaxy Nexus was on Verizon. And more recently the new account activation for the Nexus 7 (2013). Verizon is an immature control freak.
In the future (like next year) when Verizon deploys VoLTE (Voice over LTE) then Verizon will not be able to restrict devices on their network. All you'll need is an unlocked VoLTE device with the right frequencies and a Verizon SIM card... And Verizon will not be able to do anything to stop you. You'll then have a device that can use Verizon's LTE network for both voice and data. But you won't be able to fall back on Verizon's CDMA network. It will be VoLTE/LTE only access.
The FCC put some special requirements on the block of LTE that Verizon purchased. It has to be open for any device.
CDMA allows the carrier to control which devices connect to their network. GSM and LTE do not give the carrier that kind of power.
Sent from my Nexus 10 using Tapatalk 4