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"It adds $480 to the cost of the phone. Just on principle I want to find a way around it."
Perhaps have a talk with your daughter.
Was texting free before this? With AT&T and ANY phone, that's what that amount of texting will cost, really has nothing to do with the iPhone, but rather AT&T's standard charges.
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I thought it was $30 for unlimited texting on every phone on the plan with ATT. I am pretty sure that is what I am paying. Was a much better deal than $5 per phone for 200 messages. I've got 4 phones so $20 got everyone 200 each, or $30 and they could all send as many as they wanted. No brainer for me. I think you are looking at this the wrong way.
The pricing for text messages is no different on the iPhone than it is on any other phone you buy on ATT. In fact, neither is the data plan. The 3G data plan costs the same regardless of which 3G phone you have. Maybe you could pick up one of the original iPhones and get on the cheaper plan that way.
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The $30 all phone charge is irrelevant to me since nobody except my daughter is interested in texting. This must be an incredible cash cow for the phone companies. They are selling a service for a huge amount of money that costs them essentially nothing extra. Since the iPhone is capable of accessing the web and chat, there doesn't seem to me to be any reason for anyone to use this ridiculous service other than old habits. Years ago, SMS maybe made some sense. Today it doesn't.
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FYI
I think texting to and from another AT&T customer is free.