Honestly guys...this a mute point. Everyone has their opinions. Some people are perfectly fine being locked into contracts while others, like the many here, are not. Some people like the N4, others do not. That is why we all have choices, especially among android devices. Does the Nexus 4 have some limitations--sure. But it also has some outstanding features for the price range. I did not get one because the 16gigs (less when considering formatting, system, and apps) is not quite enough. If it had an onboard memory slot or sold in a 32 gig version, I would have been all over it (even if it had been at $399). But that is just me. I can get over the fact of a non removable battery or the lack of sd memory if it was available in 32 gigs. While the "cloud" is great, it does not beat internal memory vs the usage of data or wifi for stuff when looking at battery consumption.
As far as the N4 being a flagship phone....this makes no sense. Flagship seems to indicate that it is "star" phone among all the current phones made by the company. For Google, the N4 is the only current phone being sold. Given the low numbers produced I would say that LG does not consider it the flagship. Since it is the only model (with the only difference being storage) offered by Google, then it is simply the Nexus 4 and labeling it the flagship is incorrect.
Ok...Google made a Global android phone...and there is no LTE (officially). If this bothers you...don't buy it. If you like another phones specs and or software variants of Android, then go with that. If you like Apple, go to Apple. Like Blackberry or Microsoft...go that way.
Now as to the actual reason for the post...why so popular? Price weighed against specs (both good and bad based off individual needs, wants, and opinions), the ability to be contract free with an unlocked phone (although choices are limited to SIM companies in the U.S.), a truly global phone for those that may travel, looks (I would imagine someone bought it for this reason), and maybe because for a while getting one was an enigma because of a lack of availability (exclusiveness). I think the reasons pretty much rank in this order.