It seems price wasn't the only factor...
I've been doing some digging today and some interesting news is starting to filter through: the premium £329 16GB iPhone is also close to selling out.
Wander on over to the Carphone Warehouse today and you'll it has no iPhones of any capacity to sell, zero, zip, nada (grab above). Head on over to the O2 site and while you'll still see the 16GBer available a few choice calls reveal that it is also down to the last few units.
So what can we draw from this? Personally I'd say one of two things - or a combination of both: 1. Dropping the price of the 8GB model so radically has spurred interest in a device that was clearly too rich for the masses' blood on launch and its subsequent shortage has ironically fuelled a craving to have one no matter the cost. 2. The 16GB version was always a very slow seller so Apple has started to cut back on shipments of it too meaning, yup - 3G iPhone time!
Interestingly, this development arises just after rumours began flying late last night that AT&T plans to dissuade unlockers by heavily subsidizing the impending 3G iPhone to the tune of just $199 (when accompanied by a hefty, long-term contract).
So the ball's rolling Apple, best capitalise on it sooooooooon...