So keeping it in a case for two years is worth the extra $20 when it's time to sell it?

I don't know about the iPhone Upgrade Program, but T-Mobile's JUMP plan doesn't give a crap about the condition of the body of the phone as it is usually replaced when refurbished for sale as a pre-owned device or use as a Like-New Replacement. As long as it powers on, doesn't have a cracked screen and has no water damage they'll happily take it (replacing the body is cheap in most cases, so why care).