The "c" in the iPhone 5c title doesn't stand for "cheap". It stands for "clueless".
As in, we were all clueless in our speculation on Apple's motivations for creating this device.
(Okay, it actually seems to stand for "color", but humor me.)
After sitting through Apple's unveiling today and more importantly, watching the product videos, it seems decidedly more clear to me why Apple actually made the iPhone 5c.