When the Magic first came out, I was an existing customer (15 years) and when they told me I would have to pay full price for the Magic I simply said "No, that's not good enough, I'm not happy with that price."
I pointed out for how long I had been a loyal customer, that it was shameful they would not do anything for existing loyal customers, and that if they didn't give me a better price I would take my business elsewhere.
I was put on hold, and when the rep came back to the phone (after speaking to a retention manager no doubt) i was offered the Magic for $149.99.
A week later they dropped the price to $99. I called and complained, and they gave me a $50.00 rebate.
The moral of the story... the squeaky wheel gets the grease, and if you say nothing, you will get nothing.
Start with the first rep you get, tell them you've been a loyal customer and you WANT a better price. If they still say no, ask to speak to someone in the Retention Dept.
As long as you are willing to re-up for another 3 year term, they shouldn't be so picky!
(Although I can understand why they do it. The purpose of the contract is to cover the cost of the subsidized phone. If you've only had your phone, and your contract for a few months to a year, and they give you another new phone on contract, your contract is only really extended equal to the time between now and the last contract extension, which might not cover the cost of the previous phone.)