AT&T Upgrade Pricing a Ripoff

I just did some basic math, and figured out that it's actually cheaper to cancel my account with AT&T and sign up again than it is to "Upgrade".

Let's start with some basic assumptions...

1) The iPhone 5S will come out tomorrow, and the entry level price will be $199

2) AT&T charges $325 early termination fee minus $10 for every month you've had service. Having had the phone for a year, that's a $205 early termination fee.

Scenario #1 - Loyal AT&T customer

I upgrade my iPhone 5 to an iPhone 5S. AT&T quotes this pricing as $445.

Total price: $445

Phone Number: Same number

Scenario #2 - Switcher

I port my number to Verizon. I buy the entry level phone from Verizon for $199, plus the ETF of $205 to AT&T.

Total price: $404

Phone Number: Same number

Scenario #3 - End-Around

I cancel service with AT&T, and pay the ETF of $205. I sign up for a new account with AT&T for $199.

Total Price: $404

Phone Number: I lose the number

So, It appears that AT&T is penalizing users for being loyalty, while making it more desirable to switch carriers.