Well I just figure, the failure rates mean you need to add a extended warranty as a required purchase, thus intreasing the price you need. On my 2nd one, I got the walmart 2 year extended for 18$, that starts after the MS 1 year. So 3 years for 18$, which is a good bet you'll use. When you do use it, you'll get the newest model of the time and it's higher reliability, and thus a longer overall useage. So You'll looking at 1.5-3 years before you get your replacement form the warranty and that will come with a 1 year from that,so you get 2.5 minimum working length for 18$ Not bad, and considering the (probably) higher reliability of the later models, It could very well last until the end of the generation. I'd estimate the minimum average working duration at 4 years for 18$ is a safe bet.
In the long run, having a high failure rate, than becomes a low failure rate is good for warranty purchaser's, cuz you get a new improved one down the line for the price of the warranty + some patience.
Just my 2 cents.