It's easy to follow. The math works, but I wouldn't want to guess whether the plan would work out for you. There are a lot of forum posts and blog comments from folks who say they're going to try that whenever the new ** insert hot new device here ** is released. I've not read of anyone who was successful, but all that means is that they've not updated their forum posts.
Having said that, I'm sure that the carriers have looked at this kind of arrangement and probably have some means of thwarting it. Remember that they pay the retailer to sell the phone, and I'm not sure that the $350 ETF will cover Verizon for the wholesale cost of the device plus the retailer's fee. I'd bet that there's something in your agreement that prevents that. You'd have to carefully read the entire agreement (or agreements) to be sure.
If you're intent on adding a line that you don't want in order to get a new phone, I suggest that you just call Verizon and ask if you could do it that way. They may have another way to set you up too. You didn't say how long you have until your upgrade is available. If it's not a long time, it may be worth it to wait. There is a good chance the price will drop in the fall when the fall phones are released. Depending on your time and payment history with Verizon, you may also be able to score an early upgrade at a reduced discount. It doesn't hurt to ask.
BTW, I am not an employee of any phone retailer or service provider. This is based solely on my own observations and personal experience.