Personal anecdote, but the 5c does feel amazing. A friend replaced his 5s with one and after using it a bit, I wish the 5s was in that case.
"Listen. Let's put one mid tier phone on the market. Make it expensive but not necessarily any better than its predecessor. Then, we also release a phone which is actually an improvement. Our flagship, if you will. The trick is in making the mid tier marginally cheaper than the flagship. This will make the step to the flagship a lot smaller and as the mid tier is basically its predecessor with a few tweaks and a new housing, the average Joe will not even complain. We are getting rid of the old iPhone fives, improving sales for the more expensive variant and it doesn't cost us a thing!"
Over-simplified and off-the-cuff:
Many iPhone users seem to personally be on a 2 year cycle. Depreciation circa $300 / year.
Many others seem to be on a 3 year cycle, about as far as one can go before starting to really notice their handset lagging to the point of being unacceptable to them. Depreciation $200/year.
5c: Year old tech, in what for many will be "less pretigious" packaging, for $100 off the price of new tech in "more prestigious" packaging. You're immediately "out" $100, or $200, depending upon whether you are on the 3 year or the 2 year cycle.
$100/$600, for a savings of 17%. For 17% off, you're taking year old tech in a less prestigious package.