Throwing to one side the hopelessly flawed fact this is taking one demographic of people who read one media site as a statistic I think for certain early models the failure rate is higher than what they say. I fix at least a hundred 360's each week and almost certainly I'd bet its close to two thirds of Xenon model 360's will red ring inside the 3 years. The Falcons were a big improvement, with their better DVD drives and reduced board flexing with the revised chassis but still not great. The new Jaspers I've seen so far have all been fine so I suspect they will be closer to a more normal failure rate.
There is no denying the 360 was dreadfully designed, there is no excuse for Microsoft and it's certainly not worth defending them even with their extended warranty for the defects. The important factor now is that Microsoft give the best customer service possible to those with issues and continue to improve the design to stop it occuring in future.
As a side note the PS3 failure rates are on the increase now as the early type 1 bluray lasers die off and YLOD rears it's ugly head. The 10% failure rate is more in line with my experiences than the often quoted
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