The reason for all of this is simple. They need to make money. Giving you a $500 device for $99, they need you to stay under contract to make a profit. That is why they have the incentives- they are subsidizing the device because they know you will cover the cost in service. You can go right ahead and buy the phone outright with no contract, but they can't afford to subsidize the phone when you do that.
Are you sure? I would imagine that part of their business plan is to write off the loss they take on susidizing the phones.
As for upgrades of software- yes, Verizon does sometimes slow these down, usually just to test updates and make sure they don't screw up the system or ruin your phone; but most of the time it is the manufacturer that needs to make the upgrade first before Verizon can approve it for distribution. It's not all their fault.
It shouldn't take this long to update the operating system, I get that they want to sell Droids during the Holidays - instead of low cost phones, but enough already give us 2.2!
Verizon has provided me with good service, they have cutting edge devices, and they continue to move forward. I don't work for them, I simply feel a business has a right to make money. I don't think they are bleeding us and hope they continue with unlimited data plans as I feel that is a huge issue with ATT. Nope, they aren't the cheapest, they don't have the iPhone (for at least 3 more hours) and they don't have "the fastest 3G network in America". They do provide me with reliable, consistent service at a competitive rate.