It's really quite simple. That iPhone, like most manufactured goods, is warranted against defects and workmanship for a limited time. Like any other defect, Apple is willing to repair it for no charge during the warranty period. Once that warranty expires, sorry, you have to pay.
In this case, they don't have to look for signs of abuse, or get into a pissing match about what you should or shouldn't have done... they just looked at the date of purchase.
If it was up to me? I'd have to classify what you did as abuse, like trying to use the phone to hammer nails. It's not an accident or stupidity - you knew what would happen, and you did it anyway. If some less well-informed person did it, or was tricked into it... I'd have a heart and fix it for free. You? No chance. "Apple will be issuing a free software fix. You can wait until it's available. If you needed the phone that badly, you shouldn't have performed experiments on it."