Might be an unpopular opinion, but in terms of value I think phones are worth it. Think of how much time people spend on their phones, and how much frustration you save from not having a PoS phone. For many people, phone's are their "computer".
As another comment pointed out, the price comparison is poor. What changed is the value of the phone and what people are willing to spend. When phones got good enough many were willing to replace a traditional computer with the phone.
Don't forget that social networks were a thing back at the release of the first iPhone. I suspect far fewer people would be see as much value in a smart phone if they couldn't access Facebook, Instagram, Twitter, or Reddit on it.