Of course the cost is built into the cost of your package because nothing is ever free but it is deemed to be "free" otherwise at the end of your fixed term contract the price of your broadband would need to drop to reflect that the Homehub has been paid for.
Yes it should be fit for purpose and general speaking given the number that BT must supply it will be fit for purpose, as in it will connect to the Internet by either wireless or Ethernet but that doesn't stop it being a poor piece of equipment.
A Trabant motor car was fit for purpose but would you want to use that as your main means of transport!
If it is a VDSL Modem/router (one box solution) they start about £70. If you have an Openreach modem or buy one from an auction site for about £20 you can then use it with a router that has a WAN port and they start about £25 upwards depending on what spec you want.
Have a look at this link or search the Internet for router specs then decide what you need for your own use and devices.
The wretched HH5 is showing signs of recovery, but as is history with most successful industries in the past, by the time BT have sorted out all the problems, the customer has moved on to something which he thinks is better. Another supplier has moved in with yet more promises.
To repeat - it's strange that the BT Shop is selling and displaying Hubs in order of popularity - like top of the pops. No. 3 is now going at a reduced price, much less than the HH5, and is selling well.
Perhaps this is an indication of loyalty within BT departments!
that's the thing though. the hh5 seems to have been working fine for most people until the recent debacle. happy to be corrected if i'm mistaken.