You could say the same thing about health insurance. I have paid more in premiums that I have made claims for (I think), but I still find the insurance valuable. For some monthly amount that I have already budgeted, I am protected against the cost of any health-related issue. Not worrying about this is worth "throwing money away" for -- it is about balancing risk. (Things that aren't risky, like savings accounts or health insurance, aren't necessarily the best use of money. You could have made more money investing in subprime mortgages. Of course, too much risk, and you lose everything.)
Warranties are like this; some people are happy paying $50 for unlimited iPod replacements for 2 years. Personally, I look at me breaking something as an opportunity to upgrade to the latest and greatest. But some people don't want to pay $300 for that opportunity.
The difference is that the maximum downside of not buying the warranty is the cost of the unit (actually the cost of the unit discounted by the regular warranty period ) the downside of not having medical insurance is that you die (at least in the land of the free / home of the brave)
Warranties are like this; some people are happy paying $50 for unlimited iPod replacements for 2 years. Personally, I look at me breaking something as an opportunity to upgrade to the latest and greatest. But some people don't want to pay $300 for that opportunity.