Microsoft Sticks it to Original 360 Owners with Expired Warranties

My XBOX 360 warranty expired about 18 months ago. I never thought to renew it because I was aware of Microsoft's policy to fix any hardware issues for the price of a new 1 year warranty. I should have checked the price of the warranty long ago as it may have been cheaper a year ago. But my XBOX 360 failed today and I checked the warranty price and it was not a fair price. $140 to fix a hardware issue and renew the warranty for 1 year.
Now here is the kicker, I would have paid it 2 weeks ago before the announcement of the 360 Elite. But now it is just unfair. Many questions have arisen with the release of the the Elite. Are the new features worth the huge price tag? Is it fair to users who shelled out that amount of cash as much as 2 years ago?

Well here is my personal dilemma. I would buy a new Elite system if I could resell my original XBOX 360. A course of action that I was set on up until 30 minutes ago. Unfortunately a broken system now prevents that unless I renew the warranty for a fourth of the price of the Elite. Do I take forget about the Elite and fix my old system or take the loss and buy the new Elite? It is an unfair situation to be in since I purchased my system the day it was released. But I guess I should consider myself lucky that it did not break until today.
But is this fair? Shouldn't systems be designed to last forever? Is Microsoft banking on selling systems for $300-$500 plus $140 one year later? I would encourage Microsoft and all console makers to offer lifetime or extended warranties from the time of purchase. I'm sure that Microsoft wants to have the lowest price tag possible but I want to know the true cost of ownership from the get-go. That is not too much to ask.