Wow...
Okay... same problem... my best guess:
Apple (and their friends??) wanted to get access to my previously private list of contacts. I NEVER enabled the iCloud (via intentionally using WRONG password) so as not to allow this. For years, no problem (relative to contacts *held hostage* by apple).
Just received the attempted apple push for 7.x but wanted to keep my 5.x for same reasons as everyone else in this thread!
Within the last 1-2 months, Apple was recently holding my phone hostage by refusing to allow any of my APP updates to my phone until I clicked on *accepting* their new TERMS and CONDITIONS to absolve their board of any wrong doings... and unilaterally rewrite anything they wanted đ
Since I needed my Craiglist updated... I had to get partial control of my iphone back by click on the *accept*.
Viola, a few days later I get the ol' unable to open phone dialer without it immediately closing issue. Reboot the phone and contacts gone.
Again, these contacts were NEVER pushed to cloud before, but I had to enable the cloud w/valid password for first time. Next enabled the Contacts ("on"), did merge (god that hurt from a privacy violation), and then Disabled the Contacts-to-cloud ("off"), electing to keep them on the phone.
Viola #2: Yup, my contacts are back -- and apple has their copy of them now! đ