feeling robbed

T-mobile does not set the prices of phones, nor the value of phones.

The manufacturer of the phone sets the price on the phone, and T-mobile simply sells it for such price. If you buy the phone for the price, then you decided it was worth the price to purchase it. In 2 years, the same exact phone is going be sold for 100-200 less brand new. That's not because phones always cost less to produce after a year, its because they're selling last gen devices to a different target demographic, and likely have already paid off their R&D and marketing costs.

When you attempt to trade in a phone, Assurant is actually purchasing it without really seeing it. They will ask a few qualifying questions of the rep who helps you, but otherwise cannot see the scratches, general wear and tear of the device. A broken back glass iPhone still qualifies as a good trade-in, but is going to require a $150 repair once it is received. Since Assurant accepts a wide variety of conditions, they level out the value between the entire range of possible qualities. Whatever the value T-Mobile pays out to you, Assurant approves and reimburses Tmo.

Trade-ins are never fair value, never when you go to a car lot or a cell phone company. If you get $800 off a new phone with trade in, that is like the $20-350 your phone is worth and the rest comes out of manufacturer incentives and T-Mobile's marketing budget. T-Mobile is subsidizing your phone with a promotion, but if no promotion is available you can only get whatever Assurant is willing to pay for a "used functioning any condition" phone.