The simple version is: US cell phone contract = service bundled with a small loan for a phone.

It isn't that bad. They can't charge you whatever they want, your plan is locked in, and if they change it you can leave without penalty. For whatever reason you leave, you can take your number. Pre paid plans are available as options.

Nothing forces you to stay with a carrier. The penalty is just recouping some of the unpaid value of the phone. You owe less as time goes because you are paying back the value of the phone through your contract.