My guess is this might be a dual-subsidy from Google and VZW in order to make it cheaper and "low risk" to entice people who still have feature phones to try the world of smartphones.
Would also jump all over $199 for the Moto X off-contract but don't see that happening. I'm starting to itch to upgrade, but I want to see if VZW does anything with unlimited and what happens with VoLTE. I have a feeling VoLTE will be so superior in quality that it will be hard to pass-up, and I'd guess you won't be able to get it and still keep unlimited.
By the way, for anyone eyeing a new phone purchase - looks like old phones might not be VoLTE compatible. Add to that a past history of the first batch of phones with new tech not being quite up to par and I'm waiting before shelling out $600+ retail for a phone.