After the recent price drop, it ends up being only 25% cheaper than a Nexus 4, which is way more phone than this. It's not clear to me that there's anyone interested in the particular price/features intersection where this phone sits.
Right now, I pay roughly $10 a month for my phone, and I'm reasonably happy with that (the reception is a bit weak, perhaps because the phone is so cheap, or perhaps because Tracfone is bad in my area).The problem is that my phone itself is terrible. The UI and the physical design are both atrocious.
I'd gladly drop $100 on a device that was pleasant to use. I've even contemplated shelling out a few hundred for a no-contract smartphone (I have wifi at work, wifi at home, etc...)
Nobody is forcing you to get a data plan with your Nexus 4.
But the RAZR wasn't that much better than everything else either and it sold over 100 million units.