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Don't confuse general touchscreen issues with complaints about screens failing to respond to touch because the screen has been broken. That is a common complaint for all ereaders, whereas the touchscreen becoming unresponsive and failing without damage to the screen is not at all common. Do a search in this forum and I'm sure you'll find very few, not just in the Amazon section, elsewhere in the forum too.
Amazon probably responded to your initial complaint with their standard, lets try and fix it and if not, as its out of warranty we'll offer you a discount on a new one. Once established that its an actual fault, they've rightly offered you a replacement.
Build quality of ereaders is usually fine (and I don't think there's much to choose between Amazon and for example, Kobo), its always the fragility of the screen that is an issue, the screen of an ereader is more fragile than a tablet, and that catches a lot of people out. The area where Amazon is better is the customer support if something goes wrong.
As you are getting a new Kindle from them, and as long as you take care of your ereader, there's no reason why your replacement won't last for 4 years or more. Plenty of people still have old Kindle's they've owned for 4-5 years or more. As for your other options, mainly Kobo in the UK.
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