If I'm allowed to take a hammer and smash the phone while it's "bound by a service agreement" I should also be allowed to fiddle with the electronics.

The reason it is not illegal to smash the phone is because it is your phone. The service agreement is a contract that you entered saying you will pay a monthly fee for two years independently of what happens to the phone. The phone is used by the phone company as an incentive to get you to enter the contract.

In any case, breaking a term of a private contract is not a criminal act. If I stop paying my monthly phone bill they can potentially sue me in civil court but the FBI won't come knocking on my door. The DMCA criminal "circumvention" statute doesn't really have anything to do with the private contract.