Of course ... not every place is for every person. I spent my first year in Phuket either working on dive boats or in Patong. Loved the diving and after a season in the Similans I decided to stay longer rather than move on and continue to be a roving instructor. That was 13 years ago and I am still here. These days (like Marcia) I go to Patong only if I have to. I have a family, we enjoy living here with really my only gripe being the traffic, as Phuket is a lot lot busier than it was when I arrived. Certainly the whole island is not over developed, only in some areas especially Patong, and some kind of relief roads are needed around Phuket City. I have never been cheated at a gas station and don't know anyone who has, and I had one credit card fraud problem about 10 years ago which my bank contacted me about and it was sorted with no fuss at all. If you have a card problem do not wait until you get home to contact your bank. Contact them as soon as you can.
Taxi ... 500 Baht from the airport is very cheap to any of the main beach areas, and 1400 Baht to get back is expensive. I work in Karon and the local taxis there ask 1000 Baht to the airport. Please remember that its about 50km, so that is in no way an unfair charge... whereas 400 baht from Karon to Patong is a bit silly. Renting scooters or a car is a good idea here. Make sure you have an international driving licence just as you'd need in any other country, and don't try riding a scooter for the first time here.
Diving prices. Well, the gulf specifically Koh Tao is run a different way, a few dive sites to choose from, close to the island, and the majority of divers are youngsters doing courses. Day trips in Phuket have to include transfers, breakfast, lunch, drinks, and the shortest trip is about 90 minutes to Racha Yai island. The prices here for a diving day trip are comparable to day trips for other activities... and in any case, serious divers really tend to come here for the Similan islands for which liveaboards are the best option - from late October to early May only. We are in low season now so diving options are more limited. If weather is good, the local dive sites in low season are just as good or better than high season.
Phuket island and the surrounding area - great place to live, full of life and culture. Last weekend for example I attended a street parade in Phuket Town for traditional Baba weddings, and coming up in a few weeks is a 3 day festival in Kathu village, between Patong and Phuket Town. Much of the island is green and agricultural. The tourists stick to small areas near the beaches. When I sleep at home at night, the silence is deafening, normally just insects chirping or frogs croaking after the rain. Nightlife? Yeh, I avoid Patong .. If I go out at all (not much, I am a quiet family guy) I go to Phuket Town which has many small bars and pubs, some with live music.
The real Phuket is not in Patong

Do have a look at my blog, which I have been doing since 2006 ...
Jamie's Phuket Blog.
Cheers!