I actually would reject that option.
Apple has been doing a limited number of courtesy replacements ever since they had the original fiasco with the first iPhone of having pre-release reviewers complain that it would break easily if dropped, and was too expensive for that to be justified. Then, Apple tempered the glass and told the press that it would make it fairly difficult to break. When people still found a way to break it, it was in Apple's interest to keep them from creating a negative buzz by humoring them. Good business sense, since making a completely unbreakable iPhone isn't very feasible.
Besides that, Apple and AT&T profit from your iPhone based on not only your purchase price but your projected contract expenditures over two years. Two years of a $100/mo contract is a lot more revenue than the sale price of the iPhone. So it is worth it to them to some extent.
OTOH, you could argue that it was a waste of a courtesy on a user who was prepared to pay, vs. a better investment with another user who would not have paid and would've gone to a lesser phone, and dropped their AT&T contract to one that cost a lot less / month, actually eating into AT&T/APple revenues.
