It's not illegal. Crappy, lousy and a shame, but not illegal -- unless you consider Verizon blocking tethering applications illegal as well. It's an agreement between Verizon and Google -- and if it runs counter to what you feel is fair, don't buy the phone. That's the response you'll get if you reach high enough on Verizon's ladder. I'm not particularly happy about it either -- not to mention the lack of an SD slot -- but if Google Wallet is something I absolutely need, I figure I can always root. The bottom line here is that until carriers wake up to the fact that Google Wallet is something they need to incorporate rather than isolate -- or at least try to isolate -- things will change. 'Til then, not so much.