All of the Apple warranties for hardware that I've seen specifically exclude coverage for cosmetic things.
I can't find the iPhone 5 warranty posted on their website yet, but this is what it says for all of the other iPhones:
"This Warranty does not apply: (a) <snip>; (b) to cosmetic damage, including but not limited to scratches, dents and broken plastic on ports;"
I'm glad that they're replacing the phones anyway, but I'm confused about your constant use of the term "warranty".