Most people do not want to be locked in with a particular company for 2 years, so many are choosing to go as a pay-as-you-go or a prepaid plan. Cell service should be getting cheaper as the technology advances, but contracts are a way to keep cell phone companies making huge profits, at the expense of consumers.
The contract is designed to lock you into their scope or force you to pay a ridiculous sum to escape (even if their poor service was the reason). It is essentially a mini-monopoly and should be abolished. Far more competitive rates have sprung up in the pre-pay arena and month to month fields of service and contract companies should adopt this model instead of simply limiting how much bandwidth they're willing to parcel out to the smaller subsidiaries. It would lead to happier customers who would likely be willing to pay out additional amounts for add on plans and perks.
Yes, I think now is the time for cell phone companies to do away with contracts and no longer lock customers into long-term commitments through contracts. I think that most Americans want to try and find the best cell phone company, and having a contract gets in the way of Americans in their search.
It does not make sense for cell phone companies to get rid of contracts if they are still getting customers. If it would help their business to get rid of them, then they should do it. I personally don't like the contract thing, but that does not mean that the companies should get rid of them as long as they aren't hurting business.