Nah, many people aren't down with paying more monthly rather than getting a phone on an upgrade for $200.
It WILL hurt sales a bit, its almost incomprehensible to not think that it won't.
Your options are:
Get a phone for $700+
Get one for ZERO down, but raise your monthly bill by about $40 per month per line, BEFORE insurance.
The ones without self control will jump on it quick, but smart buyers on a budget won't be as eager to make that move. I expect Android and Windows Phone sales to see a little spike because of this, unless Apple counters with a $300 off-contract iPhone. I am sure this was talked about with Apple and Verizon, I expect the new iPhone to be released in just over a month and under 2 months to clear all the upgrade eligible iPhone group and avoid media backlash at time of launch.
Sprint is in a weird position, if I were them I would STICK with the contracts through this next iPhone release and see how it can possibly help them since they are the only carrier that offers all options.