I still say you made out pretty well here. I've had to send in some units for mail in repairs, and can tell you the retail store is eating about $300 here minimum, assuming that since they're part of the Apple parent company, they can get some kind of exemption for damaged units on the flat rate repairs. Otherwise, from what you've described, they're going to probably be eating over $1,000 to repair the thing. I'd have to look up the specific rates, but the store is likely going to take a pretty big hit on this.
And allow me to just share a little story about a system that I just looked at today. It was only about a month and a day out of warranty, came in because the owner was complaining about it running really slowly. Which it was, and so I run a diagnostic on it, which gives rather strange results. Some CPU thermal sensors aren't reporting any readings. So, I open it up, and there's a tiny little bit of corrosion on the logic board not too far from where the magsafe board plugs into the logic board. Doing my usual due diligence, I take some photos, and send them off to Apple to get a second opinion. They said that it was a shame because the system seems to be in really good condition, but it appeared to be some kind of liquid damage, and the fact that it's out of warranty made it very difficult for them to grant an exception. I don't know the full details of how their exception system works, but
there are some guidelines and I wouldn't be surprised if that store
manager will have to do some explaining for your system. Granting you
that repair could potentially be a career ending move for that manager.
So, count yourself lucky, because you could have been in the position of the person from my story, where I had to refuse the repair. Had this been any other company, they probably would have just said there's nothing they can do, it's out of warranty and not their problem. If it were me, I'd probably call up Apple and say how happy I was with the service I received at that store, and single out the manager in particular. You want to think long term here, and keep that person in that position should you ever run into an issue like this again. It's not worth burning this guy to get a single new system if the person they replace him with is some hard-**** who will be happy to show you the door or where you can BUY a new system at full retail, but little else. Don't be greedy here, take your winnings and quit while you're ahead.