The is a high percentage of users on this very forum that have bought numerous 360s before the warranty was extended for that specific issue. Is it that hard to envisage that maybe 1~5% (being conservative here) of the 360s sales are repeat purchasers replacing broken machines?
The warranty was extended in summer of 2007. This means you would have needed to buy the console within the first 8 months of launch, and have it fail in that (up to 8 month) window before coverage was extended. There were only about 4 million xbox's sold in that 8 month window worldwide. They would also have to be customers who didn't buy an extended warranty, they would also have to reside in a region where longer warranties aren't mandated by law.
So yes its decently hard to imagine that over 60% of the consoles (using your 5% of total xbox360s sold) owners in that first 8 months, had it fail just over a year later, did not buy an extended warranty AND went out and bought a new one instead of having their console repaired for 1/3rd of the price.