There needs to be a law.

While I share your frustration and personally believe phones are overpriced, that is not the fault of the carriers...

You do have a choice - AFAIK, carriers cannot prevent you from using a compatible device on their network (at least in the US).

However, with that choice comes a price.

The $50 I paid AT&T for my Xenon is nowhere near the MSRP of ~$300.

The carrier contracts with the phone manufacturer, gets a branded firmware and sometimes color and/or design, and the carrier subsidizes the phone cost.  That's why with a 2-year contract, the phone costs only $50 or less (I've seen it down to $30 or even free).

I bought my two-phones-prior phone, a Sony t-series phone, off eBay, unlocked and unbranded.  I paid about $150 for it.  I could have the same phone from AT&T for $40 or less, but it would be branded and locked.

If you can find an unbranded, unlocked Xenon, you're free to buy that and use it on the network.  People do that all the time.  But most times you'll pay MSRP or close to it.

So...  You if you buy the carrier-branded model, you got the discount (or not, if you didn't contract) and that's what you got.  The provider has no obligation to give you tools to modify it or customize it.

Nothing's stopping us from customizing the phone - except the phone itself, but that's what we bought... locked as it may be, that's what we bought.  AT&T/LG may have made a firmware that doesn't allow us "in" to it, but they're not actively doing anything to stop us (unlike how Xbox Live bans people with mod-ed Xboxes), so if/when we ever get access to it, so be it.  They can't ban us from the network for having hacked our phones, unless we are disrupting service or otherwise violating their contract rules.

If carriers were banned from having branded phones (it's a form of comarketing), then I guarantee you our service costs would rise even more.

It's almost entirely the same with AT&T (all the phones they sell are branded, but the firmware-based restrictions vary a little).  But the real question is...  If you were to buy an unbranded, unlocked phone from a source other than Bell, does Bell prevent you from using it on their network?

If Bell does prevent you from using it on their network, then yes, there should be a law against that.  They shouldn't be able to prevent you from using compatible equipment on their network.