If you buy it from Apple, then yes, it is overpriced. But worth it if something does happen. In fact, it's worth it if ANYTHING happens to your computer as it's bound to cost an arm and a leg (my girlfriend's mother replaced the hard drive in her G5 iMac through apple before I got a chance to tell her I could do it, and she paid close to $200 bucks!)
However, if you get it off of eBay or at a reduced cost, I think it is a very fair rate considering the level of service you get and the fact that you can take it into any Apple store and they'll know exactly what to do (testing, taking it in for repair, etc). 3 years is a long time for something to go wrong, especially if you have a Rev. A model or a notebook (I have the prior, and I'm eying Applecare as we speak since my warranty is up in February).
Hell, in the 3 years since I built my brother's computer, the motherboard and the video card have both flat out died, and they were both quality components. That alone cost him ~$400 (not to mention a new processor since he went from AMD to Intel), and that's only because I did the install for free. Compound that with the fact that you can't even buy new parts to forego labor costs when it comes to Apple, and you're looking at hefty maintenance fees should anything go wrong.
In a broader sense, it is very unfair, because we're at Apple's whim should anything happen to our computers. For some people, that's ok because they wouldn't know regardless how to fix it. But for people who know their way around a computer, it sucks big time. But we knew that before we signed up for the Mac Fan Club we'd have to abide by certain rules. This is, unfortunately for now, one of them.
At any rate, like someone before me said, you can argue this many ways. There isn't a clear answer. For the person whose laptop broke 40 times under Applecare, it's a godsend; likewise, for the person who never had a problem, it was an expensive piece of mind. If you think you can achieve any one objective consensus through experience and a worthy opinion, you're in for a rough ride.
As one final thought: after three years, are you really going to looking at your still perfectly functioning MBP and shout, 'dammit, what a waste of money!'?" Probably not. At most, you'll probably say "oh well."
If, however, your computer breaks after two years, will you say either 'gosh, I'm glad I got that applecare,' or 'dammit, i wished I bought that applecare!'? Almost certainly.