No one sane buys it for the list price. During launch there are always various discounts. I got S25U for 800 (without sending my old phone, just some coupons) with a 5eur/month contract last year at launch. If it really lasts 7 years it's not even that expensive.
It's market segmentation. Instead of charging what it's worth, maybe 700 EUR, they charge 1700 so they can get away with charging you 800 eur on "discount", dragging up the prices of the entire lineup below it.