*READ THE WHOLE POST OP, I GIVE SUGGESTIONS IN THE END, IT WOULD BENEFIT YOU TO READ IT ALL*
FYI, Apple's MobileMe is not the only "syncing" service that operates this way so stop the bellyaching about Apple.
Both Microsoft Exchange and Apple MobileMe do PUSH syncing which is different then manual syncing. You seem to be stuck to the definition of manual syncing.
Exchange and MobileMe operate differently in order to allow such push tech to work, in both cases the central server becomes your central point of data. The server can't push data from your phone to other devices you sync up so all your data is centrally stored on the servers and pushed out to any and all devices you connect up.
Because of this, breaking the sync has one of two outcomes. You choose to maintain a copy of the information on the device and break the sync or you completely break the device off the sync by removing all synced information.
Once again, this is not an Apple thing. It was done this way many years ago by Microsoft and it's the only way push syncing works.
You brag about Google? If you use Google's Exchange system to push all your email/contacts/calendars/etc to your devices, if you break the sync with Google it operates in the same fashion.
So, in the end, you may not want to hear it but it was user error due to not reading the documentation, messages and/or warnings given to you.
We've all made mistakes before by assuming we knew something would work a certain way when it didn't. We learned the hard way, welcome to learning the hard way.
Now, for resolutions you have 2 options as I see it.
1. If you have a backup of your phones data on a computer, you can restore that. The iPhone's contact list should be synced with the Windows address book or Microsoft Outlook depending on your selection in iTunes. This sync happens by default so unless you expressly disabled contact syncing in iTunes, your contacts should exist on your computer as they were the last time you synced in iTunes.
If this is the case, connect your iPhone to your computer and make sure it doesn't sync. If it automatically starts to sync simply swipe your iPhone like you would to unlock it, this will cancel the sync.
In iTunes while your iPhone is selected, click on the tab labeled Info.
Scroll all the way to the bottom and you'll see a few checkboxes called things like Mail, Calendar, Notes, Contacts, etc. This section allows iTunes to take what is on the computer and override anything on the phone. Check the box next to Contacts. Sync your phone, enjoy your contacts.
2. If you do not have a synced copy of your contacts, then you've learned a valuable lesson. Always have a backup, always have your data stored in multiple locations because if you don't have a backup on your PC, then your only option is to pony up the $'s to Apple and reactivate MobileMe to grab your contacts.
It would be nice if Apple would temporarily reactivate so you could grab them but regardless, if they won't then that is the only option you have.