"Does it need to provide 4x the utility to be worth 4x the price? No." Exactly! This fallacy of comparing ratios rather than differences in price is extremely

"Does it need to provide 4x the utility to be worth 4x the price? No." Exactly! This fallacy of comparing ratios rather than differences in price is extremely common, totally unjustified, and causes people lots of harm from bad spending decisions in both directions. $100 extra is $100 extra whether attached to a small purchase or a big one. The correct comparison is (as you say) between the benefit/cost of the extra spending and the benefit/cost of other marginal purchases you would consider. Comparing to the benefit/cost of the "base" purchase (the basic smartphone in this case), which may be very high because that purchase is not marginal for you, is just wrong.