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It appears it would be in your best interest to pay full retail for a new phone as that would be cheaper over the life of the phone than paying for the amount of data you use.
To answer your questions, I have my data limit set because that is the actual amount of data I need. I had unlimited data for several years before switching to the Share Everything plan. Not once did I ever come close to even using 1 GB of data. I didn't "need" to be under 1 GB of data, I just didn't use that much data. The same can be said for the other smartphone on my account at the time. That was 2 unlimited data plans at $30 each for a combined monthly data total of normally under 1 GB. I now have 4 smartphones on my plan and our data allowance is 4 GB($70/month vs $120/month if we had 4 separate data plans). We normally use between 1.9 GB/month and 2.2 GB/month.
This amount of data which we use will give us MUCH more than calling, texting and "occasionally googling the nearest Cheesecake Factory".
Of course, everyone's needs are different and it would obviously be much cheaper for you to pay full retail for an upgrade when/if you choose to do so.