Given that the shipping costs are so high I think it's reasonable that Amazon won't cover them. I doubt you'll get very far with that.
If it was me and I felt that I could afford the shipping I'd get the replacement. I place a pretty high value on reading and I'd find a crack like that to be a constant distraction. And I'd constantly worry it would get worse.
If I couldn't afford it at the time I'd live with it.
I have a Nook HD that I got about a year and a half ago. Actually I ended up with 2 of them, having also ordered one for someone else who changed their mind.
Anyway I dropped one and the screen has a little crack near the corner, quite a lot worse than yours, that prevents several entire columns of pixels from working. It's in an area that isn't much affected by most apps and isn't in the way of reading and is still fine for watching videos, which is my main use for it, but still, I've rarely used it since it cracked. I use the other one instead.
There's no reason for that. Most of the things I used it for weren't hampered by the bad area on the screen. It's on the edge and it's not a real problem. It just bugs me so I don't use it much. It's spoiled for me.
Barry