I am not in the US and not locked into a contract and neither is anyone I know IRL but nonetheless we do upgrade at the same cadence. As for the people who upgrade their phones yearly, unless they’re keeping the old phones in a locked box I think it is not that bad if those old phones see use as an upgrade for someone else (either given or sold as a second hand device) or even if those phones run duty as a makeshift device.
I personally think it only becomes a problem if it’s literally e-waste or if the majority of people were upgrading yearly (which is again because it’ll lead to the first problem but felt like putting it separately too). If it’s playing some role in the world it’s okay¹ in my book.
^(1: I wonder if people who use their old phones as a secondary device (eg: a music player for running)^) ^(are creating e-waste or not. As in if it would’ve been better if they used only one device for both purposes and either gave/sold the old phone or didn’t buy a new phone in the first place. After all one could make the case that battery degradation would make them need an earlier upgrade)