I'm sure the carriers will appeal, but what struck me was what the fallout will be from this. As it says in the article, the only reason the 3G iPhone is as inexpensive as it is, is because AT&T made a 2 year contract mandatory at that price. So while the contracts and early termination fees are a pain in the ass, will the phones and/or accessories become extremely expensive without them? And is it worth it if that's the case? Sure 2 years seems like a really long time, but 99% of the time you can upgrade your phone w/o fear of penalty, so unless something catastrophic happens, I don't see why it's such a big deal.
On the other hand, it would be good if I felt like, as a customer, I had more options. Recently cable companies and telephone services have gone to a no-contract system without too much fallout, so it's obviously possible.