And the iPhone 3GS is now free on contract too... You really can't compare the two. The top-of-the-line Android phones are competing with the top-of-the-line iPhone, and they are roughly the same price.
It's useless to compare overpriced flagship phones and say that android phones are as expensive as iPhones. It's just not true. It's like taking a high end desktop PC with the very latest hardware and comparing it to the price tag of the iMac and deduce that PCs are more expensive than Macs.