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I have two ereaders; both have been criticized (legitimately, I'd say) for being "cheap."
My Pandigital Novel is a little more than 2 years old. It's my preferred reader for PDFs and I'd say it gets light-duty use. It works no worse than the day I got it, except the battery charge is down to about 75% of what it used to be. Perfectly acceptable (to me).
My JetBook Lite is almost 2.5 years old. It's my preferred reader for almost everything and I'd say it gets heavy (maybe very heavy) use. Batteries are not an issue for this model. Everything else works as well as the day I got it. I still regard it as one of my best purchases ever.
Evaluate your risk factors. If electronics are going to fail they usually do very quickly. Tactile controls or buttons may wear out over time. Where will you take it, and how often do you drop things or bang around your luggage? I didn't need an extended warranty, but some people do. But if the cost of the warranty will cost a substantial fraction of the cost of a new ereader, you might prefer to gamble a bit.
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