When I recently updated from a 7.8 device to 8.1 I was able to bring all of my contacts with me including ones that were just on the phone. However since upgrading to an 8.1 device I've found I cannot just create a phone contact, it wants me to make it an outlook contact. Numbers for things like my doctors office, kids soccer coach, boss, etc... don't need to be linked to a hotmail/gmail/facebook/etc account I just want a name attached to a number so I know who it is when they call and can pick a name from a list when i want to call them. Is this really not possible anymore in 8.1? It seems like a massive step backward.
True, your new contact entries don't need to be linked to any account, but what would happen in case your phone breaks down or if you lose your phone? Without your new contacts backed up to your Microsoft Account, you most probably will lose all of them (unless you have a copy of all of them). You would also be able to sync all your contacts across your devices that you have registered with the same Microsoft Account... or restore them in case you needed to reset your phone to factory defaults.
With these, I don't think it is really a "step backward". Besides, you can still create a "standalone" contact number without having to link them to, for example, Facebook... the only requirement is that your contact entry will be a server-backed-up, device-synchronizable, Outlook contact. If they get linked to their Facebook account automatically, you can always choose to unlink them.