The only time I've gone "ballistic" at an Apple 'Genius' was over the battery replacement policy.
When the original iPhone came out, there was anxiety over the non-user-replaceable battery. Apple quelled this by saying that they would replace the battery for you for $70 (which was expensive, but not completely out of the realm of normalcy for a battery - some other high-end cell phones had custom batteries that cost $100.)
A couple years later, I brought my original iPhone in to have its battery replaced. Yes, it had water damage, but it worked fine. And I was paying to replace the battery, which had nothing to do with the water damage. I was told they couldn't replace the battery because it had damage. I demanded to talk to the manager, and read the manager the riot act when he confirmed the policy. Something along the lines of "if I had gotten any other phone, I could go to any electronics store and get a new battery for $20-$50 and replace it myself in two minutes. This is severely impacting my opinion of Apple, and the chances of future purchases."
About half an hour later, I got a call from a different manager, apologizing for the confusion, and saying that they would do the replacement. (Of course, what I didn't know at the time is that "battery replacement" really meant "swap the phone with a refurbished one," hence their reluctance.)
About a year later, I went to get the battery replaced on my iPhone 3G. Which had a cracked screen. I was prepared to give the same "make a scene" performance - only to have the Genius take my phone, and swap it for a refurbished model. Didn't even charge me. I don't know if my name was in a "be nice to this guy" list, or what. He claimed my phone was still under AppleCare - which it most certainly was not - it was two years old, and bought brand new with no AppleCare purchased.
So I've had direct experience with the silly policy of disallowing battery replacements because of non-stock issues. Which is nuts - "battery replacement" should be literally replacing the battery, just as with any "conventional, replaceable battery" phone. The physical condition of the phone shouldn't matter - unless the technician finds it in such condition that it may physically harm the replacement battery. Then the buyer should be warned and given the option of replacing the battery with potentially no warranty on the new battery.