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I have two Kindles, both used an average of a couple of hours per day, both in sturdy cases, and I keep the wireless radios off 99 % of the time, reducing battery drain and the frequency of recharge cycles. My Kindle keyboard is 30 months old and has traveled extensively with no damage, including trips into remote areas here in Alaska. My K4B is six months old. It has done a couple of cross-continent trips but no backcountry ones. Both devices are in near-perfect condition with no battery issues, lock-ups, etc.
I believe it seldom pays to buy extended warranties. If you look at actual statistics instead of anecdotes, you are better off keeping your money and self-insuring. Most devices and appliances you get extended warranties for do not break, and if you keep your money you have the use of it and can earn interest on it in the meantime. Also, if like me you use an AmEx card for most purchases, standard warranties are doubled.
The OP's experience does sound like an upsale attempt to me. When salespeople push extended warranties right after lauding the design and quality of their wares, I have to wonder . . .
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