Your definition is of a luxury item not a luxury brand. A car is not a luxury, but a BMW is a luxury car and a Kia is an economy car. Luxury brands sell commodities but they sell them with lux features in lux showrooms at lux prices.
Not many middle class bloke's (your words) are going to want to spend $1250 for an iPhone that used to cost them $99 or $349 just last purchase cycle two years ago. Especially if you have a family. I just bought 4 iPhone X's for myself, my wife, and my boys. With Apple Care and tax, that's $6,928.
Completely incorrect. Carriers paid for the discounts, not the customers. I myself am proof of this, my phone bill hasn't changed since 2011 for my family of 5 the only thing that's been the variable is the cost of the hardware. I paid $0 for my daughter's iPhone 5C and she costs me $35 a month with AT&T. When I went to replace the 5C the least expensive iPhone was the 6 and it cost me $349. My monthly service didn't go down when they started charging real money for the phones. The carrier subsidies were ended.
We are way off topic, so last thing. If you're still paying the same for your service, plus the cost of the hardware then you are paying too much. The cost of service should have gone down when contracts/subsidies ended. Overall most people's bills remained the same after the change to seperate device payments because of the adjustment/discounts to service. maybe you wanna look into it. have a good one.