Citing what one person "lost" because they had no claims makes no sense. Insurance is just that, insurance against something unforeseen for where you would rather pay the cost of the insurance instead of the entire cost of the item. Of course insurance companies make money (duh?). They make money off of a pool, the odds are that less people will make claims than the amount of money they collect, but that still doesn't mean no one makes claims.
I understand there is a difference between calamity type insurance for things you cannot afford to replace out of pocket, eg homeowners, auto, etc. But I have had wayyyyyyy too many electronic devices fail on me after the first year where I won't consider getting a squaretrade warranty for them. Add to that their great accidental protection and now you are covered if you are stupid as well. Also consider you can have non removable batteries covered under the squaretrade warranty, seeing as how they only have 1000 or so charges that comes in very handy as well.
I am curious though, I never knew it was so cheap to replace a dropped phone. You are saying I can go into an Apple store and get a new (or refurb) iphone 5 32gb for $230? Is that past the first year warranty period? If that's the case then it does get murky when considering $85+$50 for a squaretrade warranty/deductible. Still, for me squaretrade is cheaper, and if my phone is ruined at least I get all of my money back in the form of a check and I can do what I please with it.
I used to be dead set against warranties as well for a long time. But having had to pay cash for full replacement of electronics which have broken throughout the years, TV's, smartphones, computers, laptops, etc. made me realize that eventually, sometime, someplace they are worth it. Insurance is one of those things you gripe about and hate until you actually have to file a claim, then you are thankful you had it.